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Removal of Director
The Composition of Directors and types of directors appointed in a company depends upon the nature of the company. Director has been defined under Companies Act 2013, which means the director appointed to the board of a company.
Overview on Removal of Director
Each private company should have a least of two directors, whereas a public corporation shall have a least of three directors. A Private company can remove a director if he catches any of the incompetence specified under the Act, absents himself / herself from board adherence over 12 months. It enters into agreements or arrangements against the provisions of section 184. However, it gets excluded by order of a court or Tribunal or is convicted by a court of any crime and sentenced to imprisonment for not less than six months.
About Participation in the Removal of the Director of a Company
- The Stockholders who are keeping shares not less than a sum of Rs 5,00,000 as paid-up capital shares on the period of notice or are holding not less than 1% of the total voting power, can send a special announcement to the company for 'removal of the director.'
- Shareholders concede the power to decide the date of the meeting. However, the particular notice shall not be sent earlier than three months from the time of the meeting, although the resolution is to be moved at least 14 clear days before the date of the session.
- The considered director has given the option of being heard at the meeting before the board of directors. If the objects are validated by the stockholders and the board of the directors, then they can eliminate the procedure of the removal of the Director after consideration.
Understandings behind Resignation of Directors
- Dispute With The Board
- Misuse in The Company Affairs
- Suspension Due to Infringement
- The Recession of Nomination
What are the Eligibility Criteria to be a Director?
There are no designated qualifications, but an individual should comply with the following mentors be a director: However, according to the law, a specific natural person only can be a director of any company.
- Age Limit
- Determination of Nationality
- DIN Needed
- Limit of Valid Directorship
Ineligibility
- Unsound Mind Or Bankrupt Person
- Criminal Background
- Pending Overdue Returns
Recognition:
Types of Director
The directors of a company change in terms of the role they play, such as managing director who runs the overall purposes of the company, executive directors who look after the day to day methods, and independent directors who assure proper governance of the company. Thereby, one company can have increased directors; nevertheless, the appointment of directors also depends on the type of business like:
- As per 'Section 149(1)' of the Companies Act, 2013, every public corporation shall have a minimum number of 3 directors, whereas the least amount of directors in a private company is two and only one director in case of the 'One Person Company.'
- The highest number of directors in a public company is 15. Besides, a company can also select more than 15 directors after getting a permit from a specific resolution in the general meeting. The method of appointment of more directors does not expect the endorsement of the Central Government.
- A director can determine the maximum number of directorships up to 20, including any alternative directorship of a person.
- All the Certified companies must appoint at At least one woman director in the Board of Directors in a year from the enforcement of the second Proviso to Section 149(1) of Companies Act.
- Similarly, every public company having a turnover of Rs. 300 Crore or a paid-up portion capital of Rs. One hundred crores under the latest audited financial statements shall appoint at At least one woman director within a year from the convocation of the second Proviso to Section 149(1) of Companies Act.
Note: “If any a person holds the efficiency of director in more than 10 or 20 companies before the commencement of Companies Act, then he shall have to determine the companies where he wishes to maintain or resign as the director within one year from such beginning. After that, he shall inform about his decision to the chosen companies as well as the concerned Registrar.
Documents needed for Removal of Director
- Photograph: Passport size photo of the Director to be designated
- PAN Card: Self-attested PAN card of the Director to be designated
- Proof of Residency: Aadhar Card/ Voter ID/ Passport/ Driving License
- Digital Signature Certificate: DSC of the ongoing Director and Director to be eliminated/removed
- Identity proof before-mentioned as Passport/Election card/Driving License/Aadhar card
- Mobile number and Personal & official email id of the Director
- It is mandatory to apostle all the documents apostilled if the Director is a non-resident of India.
- Notice of resignation filed with the company
- Proof of dispatch
- Acknowledgment of form, if received.
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