A company may need to remove a director from office before the expiry of their tenure on account of loss of confidence, non-performance, conflict of interest, breach of fiduciary duty, or other valid business reasons.
Procedure for Removal of a Director under Section 169 of the Companies Act, 2013
A company may need to remove a director from office before the expiry of their tenure on account of loss of confidence, non-performance, conflict of interest, breach of fiduciary duty, or other valid business reasons. Removal of a director before the expiry of their term is governed by Section 169 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014. Unlike resignation, which is initiated by the director, removal is a shareholder-driven action requiring an Ordinary Resolution, subject to the director's statutory right to be heard.
Section 169 provides a general power to shareholders to remove a director appointed by them, but this power is not absolute – it is subject to important exceptions and procedural safeguards, particularly for Independent Directors, directors appointed under proportional representation, and directors appointed by the Tribunal under Section 242 in cases of oppression and mismanagement.
A company, by way of an Ordinary Resolution (simple majority) passed in a General Meeting, may remove a director before the expiry of their term, except in certain excluded categories.
Removal cannot be initiated directly by way of resolution at any meeting; it must first be preceded by a Special Notice from shareholders intending to propose the removal.
The director concerned must be given a copy of the notice and has a statutory right to make a written representation and be heard orally at the General Meeting.
The company must file Form DIR-12 with the Registrar of Companies within 30 days from the passing of the resolution to update the public registers.
| S. No. | Document Name | Key Guidelines / Specifications |
|---|---|---|
| 1 | Special Notice from Shareholder(s) | Notice signed by members holding not less than 1% of total voting power or holding shares on which an aggregate sum of not less than Rs. 5,00,000 has been paid up. |
| 2 | Written Representation of the Director | The official response received from the director defending their position, which must be circulated to all shareholders if received in time. |
| 3 | Board & General Meeting Minutes | Certified true copies of the resolutions passed at the meetings to authorize and execute the removal process. |
| 4 | Form DIR-12 Attachments | Copy of the Special Notice, Ordinary Resolution, evidence of serving notice to the director, and optional tracking data. |
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