The Articles of Association usually prescribe circumstances when a Director would be removed from directorship. Apart from the voluntary resignation, a director may be removed from office at any time before their term expires or notwithstanding the provisions in the Articles of Association.
The following steps are followed:
- The Company by ordinary resolution in an Annual general meeting or an extra ordinary General meeting can remove a director.
- Special Notice about the resolution to remove a director or to appoint somebody instead of a director so removed at the meeting at which he is removed shall be issued to the members.
- A copy of the said notice to be send to the director to be removed also.
- The director shall be given an opportunity of being heard in the meeting.
- If the director gives any written representation to the notice, then the said representation shall be given to all members unless they are received too late.
- If the representation could not be given to all members, then the Director can request the said representation to be read out in the meeting.
- The members can pass an ordinary resolution, by simple majority and remove the director.
- The Company shall within 14 days from the removal of a director file Form 203A and a copy of the resolution with the Registrar of Companies
A vacancy created by the removal of a director under the section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy. A removed director may claim compensation for the loss of office.
NOTE: The subsection does not in the case of a private company authorize the removal of a director holding office for life at the commencement of Companies Act, whether or not subject to retirement under an age-limit by virtue of the articles or otherwise.
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