Removal Of Director

Procedure for Removal of Director as per the Companies Act, 2013

Generally, a company’s management lies with the company’s Board of directors and they always work for the advancement of the company and its shareholders. The Board of directors of the company are the agents of the company, elected by the shareholders to manage its routine affairs and the provision of the Companies Act, 2013 gave them special rights to protect themselves from the outsiders and the insiders also. In this article we have discussed the step by step procedure for the Removal of a Director (How to remove a Director?) as per the Companies Act, 2013.

One of the crucial rights which Companies Act 2013 gave them is the right to remove the Directors of the company if they are not acting in agreement with the company’s constitution, and only utilizing their powers for their benefits.

The Board of directors of the company is the key person who is in charge of running a business operation of the company. However, there are certain situations where the company management decides to remove a director owing to any negligence, breach of privacy or any other term by which a director was supposed to comply with.

Who is the director?

As stated by the Companies Act, 2013 director means a director appointed to the Board of a company. In a general sense, it is the natural person who has specific education and experience which adds up to the prosperity of the company.

As per Section 2(34) the CA, 2013 A director means any individual who is elected as the director of the Company by its board to perform certain duties and functions on behalf of the company as per the provisions of the Companies Act, 2013.

Only an individual should be elected as a director of a Company. No association, body corporate, or firm should be appointed as a director of a Company. Section 169 of the CA, 2013 act deals with the removal of Directors.

Section 149 of the Companies Act provide that a public limited company is mandatory to have at least three directors, whereas at least two directors are needed in the situation of a private company and one director is mandatory to be elected in situations of a one Person Company. A maximum of fifteen directors can be selected by a company. However, a company can appoint higher than fifteen directors only after passing a special resolution at its annual general meeting or extraordinary general meeting.