Resignation of Director
Resignation of director is a significant event which requires complying with provisions of Companies Act, 2013. A director may resign from company when he wishes to do so. Under sec 168 of Companies Act, 2013 deals with resignation of director.
In this Article we will discuss about the applicable provisions of companies Act, Compliances done by Company as well as director of the company in case of resignation of director.
Provisions of Resignation of Director under Companies Act, 2013
- As per sec168 of Companies Act, 2013 a director may resign from company by giving notice in writing to company and board on receipt of notice, company intimate to ROC within 30 days of receipt of notice.
- Director may also intimate to ROC (forward copy of resignation) along with reason for resignation.
- Effective date of Resignation of director shall be date of date on which notice received by company and date specified by director in notice, whichever is later.
- Director liable for all offences occurred during his tenure even after his resignation.
Rule 15 and 16 Companies (Appointment and Qualification of Directors) Rules, 2014
- Company shall intimate to ROC in Form DIR-12 within 30 days from receipt of notice of resignation.
- Director resign from company may within 30 days from date of resignation intimate to ROC IN Form DIR-11 along with fees.
- In case company already file Form DIR-12 under rule 15, foreign director resign from company may authorized in writing a PCA/PCS/PCA to sign Form DIR-11 and file on behalf of foreign director along with reason.
Effective Date of Resignation
Effective date of Resignation of director shall be date of date on which notice received by company and date specified by director in notice, whichever is later.
Example:
Mr X a director of ABC ltd. He prepare letter of resignation on 10th Oct 2024 and same received by company on 15th Oct 2024 in this case, effective date would be 15th Oct 2024.
Example:
Mr X a director of ABC ltd. He prepare letter of resignation on 10th Oct 2024 and mention in later last day of working is 30th Oct 2024. And same received by company on 15th Oct 2024 in this case, effective date would be 30th Oct 2024 i.e. later of above.
In resignation of director there is no mandatory concept for accepting resignation of director by board of company.
Compliances by Resigning Director
- To deliver notice of resignation to the Company/ Board
- To file Form DIR-12 along with reason of resignation within 30days from date of resignation (this form is completely optional). It is recommended for director to file Form, if there is reason to believe that company may delay or default in filing form.
Compliances by Company
- To hold board meeting within 30 days of receipt of notice of resignation, take note notice of resignation and pass necessary resolution for same.
- To file Form DIR-12 within 30 days of date of receipt of notice.
- To file form MGT-14 within 30 days of Board Meeting after considering notice of resignation of Director
- Post intimate of resignation of director on website of company (in case, no website of company it is not required)
- To place the facts of resignation of director in Board Report to be laid down in General Meeting.
- In case company is listed company, disclosure of such resignation intimate to stock exchange within 7 Days from date of such resignation.
Penalty/ Additional fees for late filing Form
| Default | Penalty / Additional Fees |
| Company in default of Provision of section Sec 168 – | Rs. 50,000 + 500 per day (in case continuing default) subject to maximum Rs. 3lakhs |
| Officer in default of Provision of section Sec 168 – | Rs. 50,000 + 500 per day (in case continuing default) subject to maximum Rs. 1lakh |
| Form DIR-12 | Twice of normal fees beyond 30 days subject to maximum 12 times |
| Form MGT-14 | Twice of normal fees beyond 30 days subject to maximum 12 times |
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