Section 168 of the Companies Act, 2013 deals with the resignation of Director of Companywhich was absent in the Companies Act, 1956.
Manner of resignation:- A Director may resign by giving a notice in writing specifying the reasons of his/her resignation which can be Better Career Options, Disagreement with the Board, Irregularities in the Company Affairs, Fear, Withdrawal of nomination, etc. After receiving the notice of resignation, the Board shall take note of the same.
Effective date of resignation:- The resignation of a Director shall take effect from the date on which the notice is received by the Company or the date, if any, specified by the Director in the notice, whichever is later.
Liability after resignation:– The Director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.
Compliance to be done by the Company upon receipt of notice of resignation:-
Step I: Convene a Board Meeting and take note of the resignation by passing a Board Resolution.The Board shall also authorize any Director to inform the Resignation of Director to the Registrar of Companies.
Step II: After taking note of the resignation, the Company shall file Form DIR-12 with the concerned registrar along with the prescribed fee within 30 days from the date of receipt of notice of resignation.
Attachments with Form DIR-12
- Notice of resignation
- Evidence of cessation i.e. Board Resolution
Step III: The Company Officer or Director shall make necessary entry in the Register of Directors and Key Managerial Personnel [maintained under Section 170 of the Companies Act, 2013 read with Rule 17 of the Companies (Appointment and Qualification of Directors) Rules, 2014].
Step IV: The Company is also required to disclose the fact of such resignation in the Report of Directors laid in the immediately following general meeting of the Company.
Compliance to be done by the Director after giving notice of resignation:-
The Director may file a copy of notice of resignation in Form DIR-11 with the registrar within a period of thirty days from the date of resignation along with the prescribed fee. A Foreign Director resigning from his office may authorise in writing a practising chartered accountant or cost accountant in practice or company secretary in practice or any other resident director of the company to sign Form DIR-11 and file the same on his behalf intimating the reasons for the resignation.
Attachments with Form DIR-11
- Notice of resignation
- Proof of dispatch of Notice
- Acknowledgement received from Company, if any
In case of resignation of all Directors:-
Where all the directors of a company resign from their offices, or vacate their offices under Section 167 of the Act, the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in general meeting.
Important Note: When a Director files eForm DIR-11 for intimating about his resignation before the Company files eForm DIR-12, an email will be sent to the Company for filing the eForm DIR-12 and the status of the Director in the Company will be changed to ‘Resigned’ against the selected designation. Once the Company files the relevant eForm DIR-12, the status shall be changed as per the existing system.
