Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Prakash   11 August 2021

Removal of MD

Whether majority of Directors of Board can remove the MD before expiry of his term, appointed by the same Board and ratified by the AGM (all unanimously) in a Public Limited Conpany scenario ?


 4 Replies

Ayush Srivastava (Advocate/Attorney/Solicitor)     11 August 2021

Hi Prakash,

there might be something we can help you with, would you mind discussing this over a phone call?

Kevin Moses Paul   11 August 2021

In accordance to your query let me tell you that Board of directors of company are important persons who are responsible for operating a business operation of company. However, there some situations when the Management of company decides to remove a director due to any negligence, breach of privacy or any other condition. Term which a director was supposed to abide by.

The conclusive group of various directors in a company are referred to as Board of Directors of that company. As per the Companies Act, 2013 “Managing Director” means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called.

Now, coming back to the removal of the MD let me inform you that it is a situation where the Board management of the company decided Suo-moto to remove director from company. It is both practical as well as legal, for the Board of Directors to remove any of its director but there is procedure for removal of director from company.

The Companies Act, 2013 contains legal provisions in concern to the removal of a Director. The Section 169 of the Companies Act, 2013 deals with the removal of director. The company needs to comply with this provision other wise company and its officer will attract penal provisions under The Companies Act, 2013.

Hope It Helps!

Regards
Kevin M. Paul

Ashwitaa   30 August 2021

REMOVAL OF DIRECTORS (Section 169 of the Companies Act, 2013) A company may remove a director except the director appointed by NCLT, before the expiry of the term of his office after giving him an opportunity of being heard . Following are the Conditions for removal (a) Special Notice: A special notice of the meeting shall be given before passing ordinary resolution, for removal of director or to appoint another director in place of a director so removed. (b) Send Special Notice to Director: On receipt of notice of a resolution regarding removal of a director, the company shall send a copy of the notice to the director concerned. (c) Send Special Notice to proposed Director: A vacancy created by the removal of a director may, if he had been appointed by the company in general meeting or by the Board, be filled by the appointment of another director in his place at the meeting at which he is removed, provided special notice of the intended appointment has been given. (d) Tenure for Appointment: Such a director so appointed shall hold office till the tenure of removed director.( had he not been removed) In case of Listed Company, it has to send proceedings of the meeting to the concerned stock exchange within 24 hours. The company also has to file DIR -12 with Registrar of Companies within 30 days of removal of director.

Ashwitaa Shetty (.)     08 October 2021

REMOVAL OF DIRECTORS (Section 169 of the Companies Act, 2013) A company may remove a director except the director appointed by NCLT, before the expiry of the term of his office after giving him an opportunity of being heard . Following are the Conditions for removal

(a) Special Notice: A special notice of the meeting shall be given before passing ordinary resolution, for removal of director or to appoint another director in place of a director so removed.

(b) Send Special Notice to Director: On receipt of notice of a resolution regarding removal of a director, the company shall send a copy of the notice to the director concerned.

(c) Send Special Notice to proposed Director: A vacancy created by the removal of a director may, if he had been appointed by the company in general meeting or by the Board, be filled by the appointment of another director in his place at the meeting at which he is removed, provided special notice of the intended appointment has been given.

(d) Tenure for Appointment: Such a director so appointed shall hold office till the tenure of removed director.( had he not been removed) In case of Listed Company, it has to send proceedings of the meeting to the concerned stock exchange within 24 hours. The company also has to file DIR -12 with Registrar of Companies within 30 days of removal of director.

 


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Start a New Discussion Unreplied Threads

LCI Learning Hindu Laws


Popular Discussion


view more »




Post a Suggestion for LCI Team
Post a Legal Query