Talk to Experts

Removal of Director Under the Companies Act 2013

Legally remove a director from your company with AccountingKaro. Our experts ensure every step complies with the Companies Act, 2013, enabling smooth, compliant leadership transitions effortlessly.

  • Complete Legal Drafting
  • ROC Filing Support
  • Expert Consultation
  • End-to-End Process Management
  • Trusted by 20,000+ Brands

Enter your details to receive a full quote and consultation

By clicking, you consent to receiving updates about our services as outlined in our Privacy Statement.

4.6 out of 5

4.7 out of 5

What Sets Us Apart

500+ MCA Certified Experts

10,000+ Verified Reviews

2500+ Monthly Clients Onboardings

Serving Businesses Across India

Overview
Types
Eligibility
Document Required
Registration Process
Ceretificate
Fess & Penalities
FAQs

Overview of Removal of Director

Running a company is like steering a ship, with directors acting as the captains responsible for its direction and operations. Directors are responsible for making critical strategic decisions. But what if a captain isn’t doing a good job? Or what if they want to leave? This is when you need to know about the removal of a director.

Who is a Director Under the Companies Act, 2013?

A director, as defined under Section 2(34) of the Companies Act, 2013, is a leader appointed by the shareholders, who are the company’s owners.

A director’s main job is to manage the company. Together, they form the Board of Directors, the team responsible for guiding the company in the right direction. The Companies Act, 2013, serves as the rulebook, outlining who directors are and their responsibilities.

Role of a Director in a Company

A director has many important jobs. Directors must act in good faith and the best interests of the company, as outlined in Section 166 of the Companies Act, 2013. Their role is to steer the company in the right direction while ensuring its success. Here are some of their key tasks:

  • Strategic Decision-Making: Directors are responsible for setting the company’s long-term strategy and making pivotal decisions about its future direction.
  • Managing the Company’s Money: They oversee the company’s finances. They ensure money is used wisely.
  • Following the Law: Directors ensure the company obeys all rules and regulations.
  • Hiring Senior Staff: They often appoint top-level managers. These managers handle daily work.
  • Protecting Shareholder Interests: They work to increase the company’s value for its owners.
  • Holding Board Meetings: They meet regularly to discuss important matters. These meetings are very important for the company’s health.

Law Governing the Director's Removal

The Companies Act, 2013, governs the removal of a director, with Section 169 giving shareholders the power to remove a director through an ordinary resolution. Other important sections include:

  • Section 167: Explains when a director’s office becomes vacant automatically.
  • Section 168: Describes how a director can resign voluntarily.
  • The National Company Law Tribunal (NCLT): Can also remove a director in certain cases.

When Can a Director Not Be Removed Under Section 169 of the Companies Act?

Section 169 gives shareholders a lot of power. But there are some limits. A director cannot be removed by shareholders in these cases:

  • Director Appointed by the Tribunal: If the National Company Law Tribunal (NCLT) has appointed a director under provisions such as Section 242 (in case of oppression and mismanagement), shareholders cannot remove them. This is done to protect the company from mismanagement.
  • Director Representing a Certain Group: Some companies have a system of proportional representation under Section 163. This helps smaller groups of shareholders appoint a director. A director appointed this way cannot be removed by the majority shareholders. This protects the rights of minority shareholders.

Grounds for Removal of a Director

A director can be removed for various reasons, ranging from poor performance and misconduct to conflicts of interest.

  • Poor Performance: The director is not contributing to the company’s growth.
  • Misconduct: The director has done something wrong or unethical.
  • Conflict of Interest: The director’s personal interests are harming the company.
  • Disqualification: Under Section 164 of the Companies Act, 2013, a director may be disqualified from acting as a director if they are declared bankrupt or fall under other disqualification criteria.
  • Health Issues: The director is unable to perform their duties due to poor health.
  • Breach of Trust: The director has acted against the company’s interests.
  • Continuous Absence: Under Section 167, if a director is absent from board meetings for 12 consecutive months, their office becomes automatically vacant.

Methods for Director Removal in India

There are three main ways a director can be removed from their position.

  1. By the Company’s Shareholders: The owners of the company can vote to remove a director. This is the most common method.
  2. Resignation by the Director: A director can choose to leave the company on their own.
  3. By the National Company Law Tribunal (NCLT): The NCLT can order the removal of a director, typically in serious cases of fraud or mismanagement. This often arises from a complaint under Section 241 of the Companies Act, 2013.

Compulsory Criteria for Director’s Removal

For the removal process to be valid, some conditions must be met. These are like essential rules that cannot be ignored.

  • Proper Notice: A special notice under Section 115 of the Companies Act must be given by shareholders who wish to remove a director. This notice must be sent at least 14 days before the meeting (excluding the date of the notice and the meeting date).
  • Opportunity to Be Heard: The director who is being removed must be given a fair chance to explain their side of the story. They can speak at the shareholder meeting.
  • Correct Voting: The removal must be approved by the required number of votes at a properly called shareholder meeting. This is usually a ordinary resolution as per Section 169.
  • Filing with the Registrar of Companies (ROC): After the removal, the company must inform the ROC. The ROC is the government body that keeps records of all companies.
  • Director’s Representation: Under Section 169(4), the director has the right to make a written representation regarding their removal. If requested within time, the company must circulate this representation to the shareholders.

Documents Checklist for Removal of Director in India

Having the right documents is very important. It ensures the process is smooth and legal. Here is a simple checklist:

  • Special Notice: A written notice from shareholders to the company.
  • Board Meeting Notice: The notice sent to all directors for the board meeting.
  • Board Resolution: A formal decision passed by the Board of Directors.
  • General Meeting Notice: The notice for the shareholder meeting where the voting will happen.
  • Ordinary Resolution: The final decision passed by the shareholders to remove the director.
  • Director’s Representation: A written statement from the director being removed (if they provide one).
  • Form DIR-12: The official form to be filed with the ROC.
  • Proof of Dispatch: Proof that notices were sent to everyone.
  • Proof of Resignation Letter (for resignation cases): A copy of the resignation letter submitted by the director.
  • Attendance Sheet/Minutes (for 12-month absence cases): Record of the director’s absence from board meetings for 12 consecutive months.
  • Representation Letter by Director: If the director has provided a representation, a letter confirming this should be included.
 

Procedure for Director’s Removal

Now, let’s look at the step-by-step process for different removal methods.

Case 1: Resignation by Directors

A director may decide to resign for personal or professional reasons. This is a voluntary process.

  1. Submission of Resignation Notice: The director initiates the process by submitting a formal, written resignation letter to the Board of Directors.
  2. Board Meeting: The company holds a board meeting to discuss the resignation.
  3. Board Accepts Resignation: The other directors formally accept the resignation.
  4. Director Informs ROC: While filing Form DIR-11 with the ROC was mandatory for directors before May 7, 2018 (under an MCA notification), it is no longer a requirement post this date. However, it is still recommended for record-keeping and safety purposes.
  5. Company Informs ROC: The company must file Form DIR-12 with the ROC. This form updates the official records. The company must file this within 30 days of the resignation.

Case 2: Director's Absence from Board Meetings for 12 Months

A director must attend board meetings, and if they miss all meetings for a continuous period of 12 months, their office becomes vacant. This is not a direct removal but a vacation of office under Section 167(1)(b) of the Companies Act.

  1. Check Attendance: The company checks its records. It confirms the director has missed all meetings for 12 months. This includes meetings they attended via video call.
  2. Board Takes Note: The Board of Directors passes a resolution. This resolution confirms that the director’s seat is now vacant.
  3. Inform the Director: The company informs the director about their removal.
  4. File Form DIR-12: The company files Form DIR-12 with the ROC. This updates the public record.

Case 3: Procedure for Removal of Director by Shareholders (Section 169)

This is a very important power given to shareholders. It ensures that they have control over who manages their company. The process is detailed in Section 169 of the Companies Act.

  1. Shareholders Send a Special Notice: A group of shareholders sends a special notice to the company. This notice states their intention to remove a director.
    • Who can send this notice? Shareholders holding at least 1% of the total voting power or holding shares on which at least Rs. 5 lakhs has been paid up.
    • Note: If the company is a private limited company, the Articles of Association (AoA) should be reviewed, as they may impose restrictions on removal powers or define a different procedure for director removal.
  2. Company Informs the Director: The company immediately sends a copy of this notice to the director who is to be removed.
  3. Director’s Right to Speak: The director has the right to make a written representation. They can ask the company to send this representation to all shareholders.
  4. Company Calls a Board Meeting: The Board of Directors meets to decide on holding a shareholder meeting.
  5. Company Calls a General Meeting: The company then calls a shareholder meeting (an Extraordinary General Meeting or EGM). The notice for this meeting must be sent at least 21 days before the meeting. The notice must mention the proposal to remove the director.
  6. Voting at the Meeting: At the meeting, the shareholders vote on the resolution. The director is given a chance to speak at the meeting.
  7. Passing the Ordinary Resolution: If more than 50% of the shareholders present and voting say ‘yes’, the resolution is passed. The director is officially removed.
  8. Filing with ROC: The company must file Form DIR-12 with the Registrar of Companies (ROC) within 30 days to report the removal.

Case 4: Removal of Nominee Director

A nominee director is appointed by a bank, financial institution, or another third party. They are appointed to protect the interests of the entity that nominated them.

The removal of a nominee director is simple. The entity that appointed them can remove them at any time as per the terms of the agreement and subject to AoA. They just need to inform the company in writing. The company’s shareholders do not have the power to remove a nominee director.

Case 5: Removal of Director by Tribunal

The National Company Law Tribunal (NCLT) can remove a director. This is a serious step taken in extreme cases under Section 242(2)(h).

The NCLT can remove a director if a complaint is filed against them for:

  • Oppression and Mismanagement: The director is managing the company in a way that is unfair to other members or harmful to the public interest.
  • Fraudulent Conduct: The director is involved in fraud.

If the NCLT finds the director guilty, it can order their removal. A director removed by the NCLT cannot be appointed as a director in any company for five years.

Removal of Director Fee Structure

The fees for removing a director are paid to the Registrar of Companies (ROC) for filing the required forms, mainly Form DIR-12. The government fee depends on the company’s authorized share capital, as follows:

Authorized Share Capital Government Fee for Form DIR-12
Up to Rs. 1,00,000 Rs. 200
Rs. 1,00,001 to Rs. 5,00,000 Rs. 300
Rs. 5,00,001 to Rs. 25,00,000 Rs. 400
Rs. 25,00,001 to Rs. 1,00,00,000 Rs. 500
Above Rs. 1,00,00,000 Rs. 600

Professional Fees: In addition to government fees, you can expect charges for the professional services involved in the removal process. These typically include:

  • Drafting of Legally Compliant Documents: We will expertly draft the Special Notice, Board/Shareholder Resolutions, and Explanatory Statements required under the Companies Act.
  • Legal Consultation: Providing expert advice on the removal process to ensure full compliance with the Companies Act, 2013, and addressing any concerns regarding shareholders and directors.
  • ROC Filing Support: Assistance with filing Form DIR-12 and other necessary forms, ensuring accuracy and timely submission.
  • End-to-End Process Management: Handling all administrative tasks, from shareholder notifications to ROC follow-ups.
  • Compliance Assurance: Ensuring the process adheres to legal requirements and deadlines, helping you avoid penalties.

These fees vary based on the complexity of the process and the services required.

Form DIR-12 for Removal of Directors

Form DIR-12 is a very important e-form. It is used to notify the ROC about any changes in the Board of Directors.

This form must be filed whenever a director is:

  • Appointed
  • Removed
  • Resigned

The company must file Form DIR-12 within 30 days of the resignation/removal/appointment of a director. The form needs to be digitally signed by a continuing director or a key managerial person of the company.

Consequences of Failing to File Form DIR-12

Not filing Form DIR-12 on time can lead to serious problems for the company.

As per the latest MCA guidelines:

  • Initial Penalty: ₹50,000 for the company and each officer in default.
  • Daily Penalty: ₹500 per day of continuing default.
  • Maximum Cap:
    • ₹3,00,000 for the company
    • ₹1,00,000 for each officer in default

This means the penalty now accrues daily after the initial 30-day window, making delays significantly more expensive over time. For example, a 208-day delay recently led to a total penalty of ₹4.54 lakh for a company and its directors.

Implications of Director Removal

The removal of a director has consequences for both the director and the company.

For the Director

  • They lose their position and power in the company.
  • If removed for misconduct, it can damage their professional reputation.
  • They may still be liable for any wrongful acts they committed while they were a director.
  • They may be entitled to compensation or damages for loss of office, depending on their employment contract.

For the Company

  • The composition of the board changes.
  • The company needs to find a new director if required by law.
  • It can affect the company’s stability and operations for a short time.
  • If the removal is controversial, it can lead to negative publicity.

Connect with AccountingKaro and let our experts handle the legal hassle while you grow your business.

Contact Us

Frequently Asked Questions (FAQs)

What is the main law for removing a director in India?

The primary law governing the removal of a director is the Companies Act, 2013. Specifically, Section 169 of the Act provides the procedure for removal by shareholders. Other sections like Section 167 (for automatic vacation of office) and Section 168 (for resignation) also apply. These rules ensure the process is fair and legally sound for everyone involved in the company’s management.

Shareholders can remove most directors by passing an ordinary resolution. However, they cannot remove a director who was appointed by the National Company Law Tribunal (NCLT). Also, a director appointed through proportional representation to protect minority interests cannot be removed this way. These exceptions are in place to ensure fairness and protect the company from instability.

A special notice is a formal request sent by shareholders to the company. It states their intention to propose a resolution for removing a director at a general meeting. This notice must be signed by shareholders holding at least 1% of the total voting power or shares worth at least five lakh rupees. It is the first official step in the removal process.

If a director is absent from all board meetings for a continuous period of 12 months, their office becomes automatically vacant. This is not considered a removal by shareholders but a vacation of office under Section 167 of the Companies Act. The company’s board will pass a resolution to note this vacancy and then file Form DIR-12 with the Registrar of Companies (ROC).

A director can resign by giving a written notice to the company. After the board accepts it, the company must file Form DIR-12 with the ROC within 30 days. The resigning director can also file a separate form, DIR-11, with the ROC. This form includes the reasons for their resignation and confirms their departure from the board.

Form DIR-12 is a crucial document filed with the Registrar of Companies (ROC) to report a director’s removal, resignation, or appointment. This form must be submitted within 30 days to officially update the government’s records on the Board of Directors.

Failing to file it on time can lead to significant penalties, including daily late fees, which can quickly become expensive. Delays also result in non-compliance, potentially damaging the company’s reputation and leading to legal complications for its officers. Filing Form DIR-12 on time is not only a mandatory legal requirement but also vital for maintaining the company’s legal standing.

No, a director cannot be removed without being heard. The Companies Act, 2013, mandates that the director must be given a reasonable opportunity to present their side. They can provide a written statement and also have the right to speak at the shareholder meeting where the resolution for their removal is being discussed. This ensures the principles of natural justice are followed.

A nominee director is appointed by a financial institution or a bank to protect its interests. The removal process for such a director is straightforward. The appointing institution can remove them at any time by simply giving notice to the company. The shareholders of the company do not have the power to vote for the removal of a nominee director.

The National Company Law Tribunal (NCLT) can remove a director in serious cases. If a director is found guilty of fraudulent activities, oppression, or mismanagement, the NCLT can order their removal. A director removed by the NCLT is disqualified from being appointed as a director in any company for five years, highlighting the severity of such an order.

A director can be removed for various reasons. These include poor performance, misconduct, or a conflict of interest that harms the company. Other grounds are a breach of duties, continuous absence from board meetings, or any action that goes against the company’s best interests. The shareholders usually decide if the reason is strong enough for removal.

An ordinary resolution is a decision approved by a simple majority of shareholders. For removing a director, this means more than 50% of the votes cast at a shareholder meeting must be in favor of the removal. It is the standard voting requirement mentioned under Section 169 of the Companies Act, making it a democratic process for shareholders.

Yes, there is a nominal government fee involved. This fee is paid for filing Form DIR-12 with the Registrar of Companies (ROC). The amount depends on the company’s authorized share capital and ranges from Rs. 200 to Rs. 600. If the form is filed late, significant additional penalty fees will be charged by the government for the delay.

A director removed under Section 169 may be able to claim compensation or damages for the termination. This depends entirely on the terms of their appointment contract. If their removal is a breach of their service contract, they can sue the company for damages. However, they cannot claim compensation if they were not entitled to any.

The essential documents include the special notice from shareholders, the notice for the board and general meetings, and the minutes of these meetings. You will also need the passed ordinary resolution and the director’s written representation, if any. Finally, the company must file Form DIR-12 with the ROC, which is the official proof of removal submitted to the government.

Why Choose AccountingKaro for Director Removal Services?

Navigating the rules for removing a director can be tricky. The process needs careful attention to detail. We make this process simple and hassle-free for you.

  • Expert Guidance: Our team of experts knows the Companies Act inside out. We guide you through every step, ensuring everything is done correctly.
  • Error-Free Documentation: We prepare all the necessary documents for you. This includes resolutions, notices, and ROC forms. This helps avoid any mistakes that could cause delays.
  • Timely Filing: We understand the importance of deadlines. Our team ensures that all forms, like DIR-12, are filed with the ROC on time. This helps you avoid heavy penalties.
  • Transparent Process: We keep you informed at every stage. You will always know the status of your request.
  • Affordable Services: Our services are priced to be affordable. We offer transparent and competitive pricing.

What Our Clients Say

View All

S

Sanket Chawre

  • Verified

Others

We had been struggling with many things during our LLP setup with RegisterKaro until Sonal stepped in as our compliance officer and overall liason. So…

Read More

Date Posted

2025-12-23

A

Ayusha Kumar

  • Verified

Others

I had a great experience getting my company incorporated with the help of Ms. Anchal Gupta. She managed the entire process very efficiently and profes…

Read More

Date Posted

2025-12-23

P

Pradip Vernekar

  • Verified

Others

I had an excellent experience with RegisterKaro. Atisha Jain and the team made the process of getting my GST certificate seamless and hassle-free. The…

Read More

Date Posted

2025-12-23

D

Dhariya

  • Verified

Others

I recently had a great experience with RegisterKaro and their employee, Satyapriya Tripathi. They provided exceptional assistance with my professional…

Read More

Date Posted

2025-12-23

Latest Blogs

View All

January 14,2026

What are CDSCO Guidelines for Medical Devices?

Joel Dsouza

Learn about CDSCO guidelines for medical devices in India. This guide covers classification, approval process, and compliance for manufacturers & importers.

Read More

January 14,2026

What are the Documents Required for a Trade License​?

Srihari Dhondalay

Learn about the documents required for a trade license in India. This checklist covers key requirements, forms, renewal documents, and specific cases.

Read More

January 14,2026

How to Download the FSSAI Certificate Online? 2026 Guide

Joel Dsouza

Learn how to download an FSSAI certificate online using FOSCOS. This guide covers the process, license number method, and registration certificate steps.

Read More

January 14,2026

How to Get a Trade License for a Dental Clinic​?

Srihari Dhondalay

Learn how to get a trade license for a dental clinic in India. Know the eligibility, process, and documents needed for clinic license registration.

Read More

January 14,2026

What is a Trade License? Eligibility, Types & Process

Joel Dsouza

Learn what a trade license is in India, its purpose, and key types. This article covers eligibility, fees, and the complete process to apply easily.

Read More

January 14,2026

Why is CDSCO Form 44 Important for New Drug Approval?

Joel Dsouza

Learn why CDSCO Form 44 is crucial for new drug approval in India. Explore its checklist, process, and documents needed for filing Form 44 with CDSCO.

Read More

Featured In

RZ-F/70, Mahavir Enclave, New Delhi 110045

  • info@accountingkaro.com
Open in Google Maps

Registrations

  • About Us
  • Blog
  • Guides
  • Have Question?
  • Contact Us

COMPLIANCE

ipr

Tools

  • NIC Code
  • Trademark Class Search
  • Trademark Search
  • Company Name Check
  • Company Details
See More
Scroll to Top