How to Remove a Director or Accept a Director's Resignation (DIR-11, DIR-12)

How does a resignation work?

Under section 168 a director can resign by giving written notice to the company. The resignation takes effect from the date the company receives it or a later date stated in the notice, whichever is later. The board notes the resignation at its next meeting, and the company files DIR-12 within 30 days of receipt, along with the resignation letter and proof of delivery.

Why might a director file DIR-11?

A resigning director may file DIR-11 with the ROC within 30 days, attaching the resignation letter and reasons. This creates an independent record in case the company delays filing DIR-12. Filing DIR-11 is optional, but it is a useful protection where relations with the company have broken down or the company is slow to file.

How is a director removed by shareholders?

Section 169 allows shareholders to remove a director, other than one appointed by the Tribunal, by ordinary resolution before the end of the term. The member proposing removal gives special notice at least 14 days before the meeting. The company sends a copy to the director, who has a right to be heard and to send written representations that the company must circulate unless they are defamatory or late.

Removal does not take away any claim the director may have for compensation under a service contract. Investor nominee directors are usually removable only in the way the shareholders' agreement and the AoA allow, so read those documents first.

What documents and filings are involved?

Keep a clear paper trail because removals are often challenged before the Tribunal as oppression or mismanagement. The table below shows the documents and filings for each exit route, and the minutes should record every step.

What can go wrong?

The company cannot let its board fall below two directors. Appoint a replacement first if needed. Remove the outgoing director from bank mandates, GST and other portal access, and DSC registrations. If DIR-12 is not filed, the director continues to appear on MCA records and may face liability for later defaults. Directors also vacate office automatically in situations listed in section 167, such as absence from all board meetings for twelve months without leave.

Checklist after a director exits

The filing is only half the job. Close the loop on access and authority quickly so the former director cannot bind the company and is not blamed for later defaults.

• Remove from bank mandates and net banking
• Revoke GST, income tax, EPFO and MCA portal access
• Update the register of directors and KMP
• Notify investors as the shareholders' agreement requires
• Recover company property, records and DSC tokens held for the company
• Update letterheads, website and statutory signage

Timeline for removal under section 169

Removal against a director's wishes takes longer than a resignation because of the notice and hearing requirements. Build in time for these steps, and add the notice period for calling an EGM if no AGM is due soon.

Step by step

1. 1Receive resignation or special notice

   Log the date the company received it.

2. 2Check board strength

   Ensure at least two directors remain; appoint a replacement if needed.

3. 3Hold board meeting

   Note the resignation or call an EGM for removal.

4. 4Give hearing (removal)

   Send special notice to the director and circulate representations.

5. 5Pass resolution

   Shareholders pass the ordinary resolution under section 169.

6. 6File DIR-12

   File within 30 days with the letter or resolution.

7. 7Update records

   Revise registers, bank mandates and portal access.