In accordance with the Companies Act of 2013, the act of a director voluntarily stepping down from their position on the board of a business is referred to as their resignation from that position.
In accordance with the Companies Act of 2013, various compliance processes need to be completed in the event of the resignation of a director. The following are the primary regulatory criteria that must be met upon the resignation of a director:
1. Intimation to the Board: Any director who wishes to step down from their position on the board of directors of the business is required to inform the board of directors of the company in writing of their decision. The date that the resignation will take effect, the reasons for the resignation (if wanted), and any other pertinent information should all be included in the resignation letter.
2. Meeting of the Board of Directors: The board of directors should call a meeting of the board of directors in order to discuss and accept the resignation. The resignation has to be documented in the meeting's official minutes and accepted by the board in the appropriate manner.
3. Letter of Resignation from Director: The director's letter of resignation should be kept as part of the company's records. It can be provided as evidence of the director's desire to resign whenever it is necessary for regulatory and compliance purposes, and it acts as proof of that intention.
4. Form DIR-12: The Company must submit Form DIR-12 to the Registrar of Companies (ROC) within thirty days of the resignation taking effect.
5. Register of Directors: The Company is required to make the appropriate changes to its Register of Directors in order to reflect the resignation of the director. The register has to be immediately updated and precisely updated, specifying the date that the resignation will become effective.
6. Disclosure in Annual Financial Statements: The fact that the director has resigned their position need to be included in the disclosure in the annual financial statements and annual report of the companies.
What is included in this
- Preparation of documents
- Filing of DIR-11
- Filing of DIR-12
- Laisioning with department
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Can a director resign at any time?
Providing formal notice of resignation to the board of directors is required in order for a director to step down from their position at any time. On the other hand, the resignation will become effective as of the date that is mentioned in the notification or as of the day that the company receives the notice, whichever date is later.
Is their any particular format of resignation letter?
Under the Companies Act of 2013, there is no specific structure for the letter of resignation that a director is required to submit. Nevertheless, it is advisable to mention the date that the resignation will take effect, the reasons for the resignation (if wanted), and any other pertinent facts. It is imperative that the resignation letter be signed and delivered to the board of directors as soon as possible.
Can a director take back their resignation?
If a director has already handed in their resignation, the only way for them to take it back is if the board of directors has not yet accepted it. If the board has already accepted the resignation, it is not possible to take it back at this point.
Can a director tender their resignation by technological methods such as email?
A director can quit through electronic methods such as email as long as the resignation is submitted in writing and includes all of the required information. It is advisable to refer the Articles of Association regarding the method of resignation.
What are the steps involved in taking a director's resignation into consideration?
The board of directors should call a meeting so that they may discuss and accept the director's resignation. It is recommended that the resignation be acknowledged in the meeting's official minutes, and that a resolution be adopted to accept the resignation.
What is the timeline to inform ROC for resignation of Directors??
The company is required to submit Form DIR-12 to the ROC within thirty days of the day the resignation became effective
Is director liable for action taken in the Company even after resignation?
Even after submitting their resignation, directors continue to be held accountable for any actions or omissions that took place during their time in office. They are responsible for ensuring that any outstanding obligations are completed, returning any business property, and providing any essential help to the companies throughout the period of transition.