Resignation of Director

Section 168 of Companies Act, 2013 read along with Rule 15 & 16 of The Companies (Appointment and Qualifications of Directors) Rules, 2014 prescribes the detailed procedure for Resignation of Director.

Upon receiving a resignation letter from a director, the company shall immediately arrange for a Board Meeting and take note of the same. Further, the board shall authorize any director to inform the Resignation of Director to the Registrar of Companies. The director may also forward his resignation voluntarily to the Registrar of Companies which is completely optional. The detailed facts of such resignation must be disclosed in the board’s report which shall be displayed in the next general meeting.

Effective date of Resignation

The effective date of Resignation shall be the latest date among these two:

• The date on which the notice is received by the company or
• The date specified by the director in the notice.

The date which is later among the above two dates shall be considered for effective date. 

Duty of Company after Resignation

Once the board takes note of the Resignation of Director, the company shall file an application in Form DIR-12 within 30 days to the Registrar of Companies to update the register of directors. Once the Form is approved, the register of directors shall be updated and the name of the director shall be removed from the Board of Directors.

Duty of Resigning director after Resignation

The resigning director may also notice his resignation voluntarily to the Registrar of Companies in Form DIR-11 along with the reasons for resignation within 30 days from date of resignation.   

Resignation of Foreign Director

If the resigning director is a foreign director and the company has already filed application in DIR-12, then he may authorize a practicing company secretary /chartered accountant/ cost accountant/ any other resident director of the company to sign the application in Form DIR-11 and file it on his behalf intimating the reasons for the resignation.

Liability of director after Resignation:

After resignation, the director shall not be responsible for any act that has happened in the Company.  The proof of delivery of the resignation letter shall be enough to discharge him of the liability in case any offence occurs after his resignation. However, the director shall be held liable for any wrongful act or offence that has occurred when he was acting as a director in the company. 

What if all the Directors of the Company resign at the same time?

When all the directors of the company resign at the same, the promoters or the Central government shall be responsible to appoint the directors. These directors shall hold office till the shareholders appoint directors in the general meeting.

Procedure for Resignation of a Director

1. Notice of Resignation:

The resigning director shall send a notice of resignation to the company mentioning the reasons for such resignation with the effective date.

2. Call for a Board Meeting:

Upon receiving the notice, Call for a Board Meeting and pass the resolution taking note of the resignation of the Director and authorize a director to file the return with the Registrar of Companies

3. Filing of Return of Resignation by the Company with the Registrar of Companies (RoC)

A Return of Resignation of Directorship in Form DIR-12 is required to be filed with Registrar within 30 days of resignation with copy of Board Resolution along with Resignation letter. Once the Form DIR-12 is approved by the ROC, the details of resigned director shall be removed in the MCA portal against respective Company.

4. Filing of Return of Resignation by the director himself with the Registrar of Companies (RoC)

The resigning director may forward his resignation voluntarily to the Registrar of Companies in Form DIR-11 along with the reasons for resignation within 30 days from date of resignation.