Resignation of Director / Designated Partner

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  • Includes:
    • Resignation filing with ROC of One Director.
    • Resignation filing with ROC of One Partner/Designated Partner.
  • Excludes:
    • ROC Challans
    • Stamp duty for Supplementary Deed of LLP.

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Resignation of a Director from a Company

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.

Related FAQ’s

As per section 168 of companies act 2013

  1. The Director shall give a resignation in writing to company.
  2. Retiring director shall also send the reason of resignation and a copy to ROC by filing e-form -*DIR* 11 within 30 days of its resignation.
  3. Company shall take note of the same by passing a board resolution to that effect and as per Rule 15 of Companies (Appointment and Qualification of Directors) Rules, 2014 the company shall intimate the registrar through filing of form DIR-12 within 30 days.

Sec 168 of company’s act 2013 does not state any requirement of acceptance of resignation of a director by BOD rather they are required to take a note of its resignation at their BOD meeting and pass the board resolution to that effect.
Further, In Renuka Datla and Ors. Vs. Biological E Limited, a question arose as to whether the director had ceased to be the director from a specified date?
According to the article 129 of AoA of the Company, the office of a director becomes vacant if a director sends his notice of resignation in writing to the company. The Court held that this clause doesn’t require the acceptance of the resignation by the board for resignation to take effect. Further, where a person had sent his notice of resignation to the company on a date, clearly expressing that he wants to relinquish his post, ceased to be the director of that company from a specified date. In the case where all the directors of a company resign, then the Central Government will appoint the required no. of directors until new directors are appointed by the company.

As per section 168(2)
The resignation shall be effective from

  1. Date on which notice is received by company or
  2. Any other date specified by director

As per section 168(2), the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.

In Scenario a. the Company can refer Section 174(2) of the Companies Act, 2013 and it’s Articles of Association for the remedy. Section 174(2) provides if the number of directors falls below the quorum then the continuing directors:

  • may appoint a director in the meeting for increasing the number of directors to that fixed for the quorum or
  • • Summon a general meeting of the company to appoint a director and for no other purpose. Clause 69 of Table F provides that if the number of directors falls below the quorum fixed by the Act, the remaining directors can, for increasing the number of directors to that fixed quorum, summon a General Meeting of the Company.
    In Scenario b. the Company can refer section 168(3) of Companies Act, 2013. The section provides that when all the directors of a company resign from the Board, the promoter or the Central Government in promoter’s absence, shall appoint the required number of directors who shall hold office till the directors can be appointed in the general meeting.

Noting mention in the section 168 of the companies act, 2013, regarding notice period of the director to be serve. However the director in the board meeting can express his opinion for not continuing as a director and his unwillingness to serve notice period.
Its upon the company then how to compensate from the director.