Removal of Director or Key Managerial Personnel

Removal of Director/ Key Managerial Personnel is a situation where the Board management of the company decides Suo-moto to remove a director from the company.
A Company may, by passing an ordinary resolution in the shareholder’s meeting, remove a director before the expiry of his term/ period after giving him a reasonable opportunity to be heard.

But the following director cannot be removed by the Company:

1. A director appointed by the Tribunal
2. The company has availed itself of the option to appoint not less than two-thirds of the total number of directors according to the principle of proportional representation as per the provision of the Companies Act, 2013.

Process for removal of director

Step 1: Intimation to the concerned director about his removal.

Step 2: Sending of Notice along with the Agenda of the Board meeting to all the Directors of the company.

Step 3: Convening of a board meeting and passing of the Board Resolution for considering the removal of the concerned Director and notice of a general meeting to members of the company.

Step 4: Sending of general meeting notice to all the members at least 14 days before the date of the general meeting along with special notice to remove a director by the specified no. of members of the company has to be passed at least 14 days before the concerned meeting.

Step 5: A special notice required to be given to the company shall be signed by such number of members holding not less than one per cent of total voting power or holding shares on which an aggregate sum of not more than five lakh rupees has been paid up on the date of the notice.

Step 6: Holding of General Meeting, allowing the removing director to be heard and speak. Passing of ordinary resolution.

Step 7: Preparation of Documents for removal of director and intimation to a registrar of Companies by filing form MGT-14 and DIR-12.

Documents required for removal of director

1. Intimation sent to the director proposed to be removed
2. Board Resolution
3. Copy of Special Notice
4. Shareholder’s resolution
5. Reason for removal of Director
6. Any other document as may be required

Taxcellent will help you draft all the related documents and remove the director as per the provisions of the act.