Section 168 of the Companies Act, 2013 (hereinafter referred to as CA, 2013) provides for resignation of director. A director may resign from his office by giving a notice in writing to the company and the board shall upon receipt of such notice take note of it and intimate the Registrar. Board shall also the fact of such resignation in the report of directors laid in the subsequent general meeting of the company. Section 168(2) required the resigning director to submit a copy of resignation along with detailed reasons to the Registrar within thirty days of resignation. The resignation shall take effect from the date on which the notice is received by the company, or the date as specified by the director in notice. Also, the proviso states that the resigning director shall be liable even after his resignation for the offences which occurred during his tenure. Section 168(3) considers a situation where all the directors of a company resign from their offices or vacate their offices under Section 167 then the promoter will take over or if they are not present then the Central Government shall appoint the required number of directors who will hold office till directors are appointed in the general meeting.
As per Section 168(1) and 173 and Secretarial Standards-I, upon receipt of the resignation letter, the company shall hold a meeting of the board or pass board resolution by circulation. There it should take note of the resignation letter given by the director of the company. Further, authorize CS or CFO or any director of the company to file requisite form with ROC.
A listed company must submit disclosures of such resignation to stock exchange where the company shares are listed within 24 hours of the conclusion of the board meeting. Further, the same has to be updated on the website within 2 working days. This has to be in compliance with Regulation 30 and 46(3) of the SEBI, (LODR) Regulations, 2015.
Section 168(1) read with rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014, ROC has to be intimated in 30 days from the receipt of notice of resignation from a director in Form DIR-12 along with requisite documents and fees.
Further, director may also forward a copy of his resignation to ROC within 30 days of resignation in Form DIR-11 along with detailed reasons for resignation and fees.
In case where a company has already filed Form DIR-12 with ROC, a foreign director of such company resigning from his company can authorize in writing a practicing Chartered Accountant or a Company Secretary to sign Form DIR-11 on his behalf.
It is pertinent to make necessary entries in the register of directors and KMP about the date of cessation of office and reasons thereof.
As per Section 134(3)(q) read with Rule 8(5) of the Companies (Accounts) Rules, 2014 and Rule 15 of the Companies (Appointment of Directors) Rules, 2014, necessary to disclose the details of directors who have resigned during the year on website and in the Board’s report.
This is the procedure that director can follow to resign.
Sapna is an Advocate and Associate at Redlaw. Her major area of practice includes Corporate and Commercial Laws, both compliance and dispute resolution. View all posts