Directors are an integral part of any company. They are responsible for the management and administration of the company. However, sometimes the need arises to remove a director due to various reasons such as misconduct, non-performance, or conflicts of interest. In such cases, the process of removal of directors needs to be carried out in accordance with the law.
Legal Provisions for Removal of Directors
The Companies Act, 2013 lays down the provisions for the removal of directors. According to Section 169 of the Act, a director can be removed by an ordinary resolution passed by the shareholders of the company after giving special notice to the director concerned. The notice must be sent at least 14 days before the meeting at which the resolution is to be moved. Moreover, The director concerned is entitled to be heard at the meeting.
Grounds for Removal of Directors
The grounds for the removal of directors are mentioned in Section 167 of the Companies Act, 2013. Some of the grounds for removal are:
- Conviction of an offence and sentenced to imprisonment for a period of at least 6 months.
- Insolvency or being declared bankrupt.
- Non-attendance of board meetings for a period of 12 months without obtaining leave of absence from the board.
- Misconduct or breach of trust.
Process of Removal of Directors
The process of removal of directors involves the following steps:
- Special notice to the director concerned: A special notice needs to be sent to the director concerned at least 14 days before the meeting at which the resolution for removal is to be moved.
- Board Meeting: The board of directors need to convene a meeting to consider the removal of the director concerned.
- Shareholders Meeting: The shareholders need to pass an ordinary resolution to remove the director concerned.
- Intimation to ROC: After the resolution is passed, the company needs to intimate the Registrar of Companies (ROC) within 30 days of the passing of the resolution.
Expert Guide to Forced Exit of Directors in Chennai Rajendra Law Office
Chennai Rajendra Law Office is a well-known law firm that provides expert guidance on the removal of directors. Of course, The firm has a team of experienced Corporate lawyers who are well-versed in the legal provisions and procedures for the removal of directors. The firm provides the following services:
Legal Advice
Firstly, The firm provides NCLT legal advice on the grounds for the removal of directors and the process to be followed. In fact, The lawyers at the firm assess the situation and provide the best course of action for the company.
Drafting of Notices and Resolutions
The firm indeed drafts the special notice to be sent to the director concerned and the resolution to be passed by the shareholders. As a matter of fact, The lawyers ensure that the notices and resolutions are in accordance with the legal provisions.
Representation
The lawyers at the firm represent the company in legal proceedings related to the removal of directors. In fact, They represent the company in board meetings and shareholders’ meetings. Meanwhile, This ensures that the process is carried out smoothly.
Compliance
The firm ensures that all legal compliances are met during the process of removal of directors. By the way, They ensure that the company intimates the ROC within the stipulated time frame and that all the documents are in order.
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Conclusion
The removal of directors is a serious matter. It needs to be carried out in accordance with the legal provisions. Moreover, The Companies Act, 2013 lays down the provisions for the removal of directors, and it is important to follow them. Chennai Rajendra Law Office provides expert guidance on the removal of directors. Of course, it ensures that the process will move smoothly and in compliance with the law.
