Removal of Director or Key Managerial Personnel

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

But the following director cannot be removed by the Company:

1. A director appointed by 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 asper the provision of the Companies Act, 2013.
   Process for removal of director

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

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

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

   Step 4: Sending of general meeting notice to all the members atleast 14 days before date of general meeting along with special notice with the intention of removing a director by the specified no. of members of the company has to be passed at least before 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 percent 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 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 drafting all the related documents and removing director as per the provisions of the act.