A director is a person connected with the overall development of a Company. It is he who is responsible for promotion and enhancement of the efficiency of the Company. The director should also ensure that the affairs of the company are being conducted within the applicable laws and regulations. Efficiency and effectiveness should be maintained at each level.
If the directors of any company are not capable in carrying on the affairs of the company in a fair and prudent manner, it needs to be removed from the company.
Certain procedures have to be followed for removing director, which are mentioned hereunder â€“
- Special notice â€“ For removing a director a special notice should be obtained from a member proposing an Ordinary Resolution for removal.
- Intimate the director – Send the copy of special notice to the director to be removed.
- Notices for General Meeting â€“ Notices to be issued for conducting a General Meeting at least 21 days before the meeting stating about the special notice and proposing the Ordinary Resolution for removal.
- Representations made â€“ If any representation has been made by the director concerned, it should also be stated in the notice and the copy of representation to be enclosed. If representation has not been given to all the members, director can request to read out such representation in the meeting.
- Opportunity of being heard â€“ The director also has the right to be heard at the meeting.
- Pass resolution – Pass the resolution and remove the director of the company.
- Inform the ROC â€“ File with ROC in e- Form 32 within 32 days regarding the appointment of new director to notify the change by paying the requisite fees.
- Signing the e- Form â€“ The e-Form should be digitally signed by the Managing Director, Manager or Company Secretary of the company duly authorized by the Board of Directors.
- Certify the e- Form â€“ The e-Form should be duly certified by a Chartered Accountant or Cost Accountant or Company Secretary in practice.
- Penalty â€“ If default is made on complying with the aforesaid requirements, the company and every officer in default shall be punishable with a fine of up to Rs. 500 for everyday during which the default continues.
Taxmantra.com will assist you in all Business Incorporation & Maintenance issues including Creation of LLPs, Companies etc and also in post incorporation issues such as assistance in other registrations, ROC Compliances and others.