Remove a Director/ Designated Partner in

The removal of director from a company is a sensitive yet essential legal action governed by the Companies Act, 2013. Directors are vital for a company’s leadership and compliance, but in some cases, their continuation may be detrimental to business interests or violate regulatory norms. Whether it’s due to absenteeism, misconduct, or voluntary resignation, companies must follow a proper legal framework to ensure lawful and smooth removal.

At Bright Advis, we guide you through every step of the procedure for removal of director, ensuring full compliance, minimal conflict, and a professional approach tailored to your business structure—especially for removal of director in private limited company cases.

Why Director Removal May Be Necessary

Directors play a pivotal role in a company’s governance, strategic decision-making, and legal compliance. However, situations may arise when a director’s removal becomes inevitable—due to disqualification, lack of participation, personal conflict, or business irrelevance.

The removal of director in private limited company must always be handled lawfully, respectfully, and with full procedural transparency. Bright Advis is here to make sure every step is legally sound and procedurally correct.

Legal Provisions for Director Removal

The removal of director Companies Act 2013 is primarily covered under Section 169. This section allows:

• Shareholders to remove a director by passing an ordinary resolution.
• Directors to be removed via NCLT (National Company Law Tribunal) in special cases.
• Exceptions exist for directors appointed under Section 163 (proportional representation), where removal is not permitted by shareholder resolution.

Reasons for Director Removal

Understanding why a director may need to be removed helps in preparing the necessary documentation and legal grounds. Common reasons include:

• Continuous absence from board meetings for 12 months (Section 167)
• Voluntary resignation
• Misconduct, breach of fiduciary duty, or conflict of interest
• Ineligibility or disqualification under Section 164
• Loss of confidence by shareholders

In many cases, the removal of director is not personal—it’s procedural, driven by the long-term interest of the company.

Methods for Director Removal

There are three recognised ways to proceed with the removal of director in private limited company:

1. Removal by Shareholders
   Requires issuance of a special notice and passing an ordinary resolution at a General Meeting.
2. Removal by Board of Directors
   Applicable in cases of additional, alternate, or casual directors. Must be supported by a board resolution.
3. Removal by Tribunal (NCLT)
   Used in complex or serious cases involving fraud, oppression, or mismanagement. Initiated under Sections 241 and 242 of the Companies Act.

Procedure for Removal of Director

The procedure depends on the method used. For most private limited companies, shareholder removal is standard:

1. Issue a Special Notice: A shareholder holding at least 1% of voting power or shares worth ₹5 lakh must issue a special notice.
2. Circulate Notice to the Director: The company must send a copy of the notice to the concerned director, giving them an opportunity to respond.
3. Conduct a General Meeting: Hold an EGM or include the resolution in the AGM agenda. Let the director be heard.
4. Pass an Ordinary Resolution: The shareholders must vote and pass an ordinary resolution.
5. File Form DIR-12: File the resolution and removal with the ROC within 30 days.

Bright Advis handles the entire legal process, from issuing notices to filing forms and updating MCA records.

Director’s Rights During Removal

A director facing removal has certain rights:

• To receive a formal written notice
• To be heard at the general meeting
• To present their defence or resignation
• To claim compensation as per contract (if applicable)

Respecting these rights avoids future litigation and maintains the company’s professional image.

Post-Removal Compliance

• File DIR-12 with Registrar of Companies
• Update the Register of Directors
• Inform banks and stakeholders
• Reallocate duties to other board members

Bright Advis ensures all backend changes are legally reflected and documented properly.

Consequences of Improper Removal

Improper or unlawful removal can result in:

• Reinstatement by court order
• MCA penalties and show-cause notices
• Civil litigation or shareholder disputes
• Damage to the company’s reputation

Follow a structured and fair process to protect your business from these legal and financial risks.

Best Practices to Follow

• Keep the board and stakeholders informed
• Maintain documentation for all notices, resolutions, and filings
• Consult legal experts before acting
• Conduct background checks to avoid reappointment of disqualified individuals

With Bright Advis, you receive full legal support, advisory consultation, and ROC compliance tracking.

FAQs on Removal of Director

Q1. Can a company remove a director without their consent?

Yes, shareholders can remove a director by passing an ordinary resolution.

Q2. What is the procedure for removal of director under Companies Act 2013?

It involves issuing special notice, conducting a general meeting, passing a resolution, and filing DIR-12.

Q3. Can a director be removed without a board meeting?

No, removal must be authorised via a formal meeting—either board or general, depending on the type of removal.

Q4. Does removal affect shareholding?

No. A director may still be a shareholder unless otherwise specified in the shareholders’ agreement.

Q5. How long does the process take?

Typically, 10–15 working days if documents and resolutions are properly managed.

Remove a Director Legally with Bright Advis

Whether it’s a voluntary exit or a critical governance decision, the removal of director should be handled carefully and in full compliance with Indian company law. Bright Advis helps you do it the right way.

• Legal notice drafting and resolution support
• Board and shareholder coordination
• MCA form filing (DIR-12) and compliance
• End-to-end advisory and documentation

Remove directors lawfully, respectfully, and efficiently — with Bright Advis by your side.