According to the provisions of the Company Act, 2013 it is mandatory for every company to have a minimum number of directors as specified. But if there is removal of any director or resignation given by any director, the company needs to notify and file it with the Ministry of Corporate Affairs.
When resignation is given by the director, in such case the Board of Directors decides whether to accept or decline the resignation. If resignation is accepted then Board passes resolution and files the removal of director with the MCA.
In this case a meeting is organised with the purpose of passing ordinary resolution in favour of removing director. Also the concerned director is given opportunity to be heard before passing the resolution.
When the director of the company abstain himself from attending three consecutive board meetings which means director is absent for 12 months even after receiving the notice. In such cases, the company files removal of director with MCA.
It is necessary to be compliant with the MCA guidelines for removal of director.
First step is giving opportunity to directors of being heard. The process of removal cannot be initiated without giving the proper opportunity to director who is to be removed.
Second step is to issue notice. This notice is processed by shareholders holding a minimum voting power of 1% or who holds shares on which an aggregate sum of not more than Rs 5,00,000 has been paid up on the date of notice. Such a notice, known as special notice must be signed by all the members. The special notice must be delivered to the company at-least 14 days prior to the date of meeting, at which the resolution will be passed.
A copy of the notice must be sent to the director concerned before 7 days of the meeting. And notice must be mandatorily published on the company’s website.
The concerned director can make a representation in writing to the company against the notice of removal. The concerned director is entitled to make a plea to the company that the representation must be sent to all the members.
After completing above steps, the organization or any aggrieved person after sending out representation can make an application to the Tribunal, requesting for nullification of the process.
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