Resignation of Directors | The Easy Way Out

According to Section 16(1) of the Companies Act, 2013, the director can resign at any time from a private limited company. Therefore, the resignation of directors validates from the date of the notice or the date specified by the director or company.

 

Resignation of Director Procedure

 

Step 1: Submission of the Resignation Letter

 

The director who wishes to resign from the company must first draft a resignation letter. 

 

Here is a format for the following:

 

 

Step 2: Submit the letter of Resignation

 

This step is very crucial and overwhelming as well.

 

But, the director still has time to rethink the decision before taking this step. 

 

However, if the director has made their mind, they can submit the letter to the board. 

 

After that, the board will have a meeting and give a resolution for the purpose.

 

If they accept the letter of resignation, they will give an acceptance letter in the following format:

 

The Board of Directors can acknowledge the resignation in 3 ways:

• E-mailing the acceptance letter in the above format.
• Sending the letter via post to the director's home address.
• Sealing and signing on the same resignation letter submitted by the director.

 

Step 3: Fill the Required Forms for Resignation of Directors

 

After the acceptance, both the director and the company are obliged to fill the necessary forms. DIR-12 Form (by Company) and DIR-11 Form (by Resigning Director) within 30 days.

 

The forms can be downloaded from the MCA Portal.

 

The fees for the following are:

 

DIR-12 Form - Rs. 300/-

DIR-11 Form - Rs. 400/-

 

The director can pay the fee directly on the MCA Official Portal.

 

Our StartEazy legal experts will also help with the entire process and paying the fees.

 

Also, there are a few obligations mentioned below that both parties have to follow for the resignation of directors. 

 

Obligation on behalf of the Resigning Director

 

• A director must give a letter of resignation to the board of directors in the above format. The valid mode of communication can be via mail or a letter to the company's address.
• The director must forward the copy of the resignation with DIR Form 11, the reason for resignation and a fee of Rs.400/- within 30 days of acceptance.
• The effective date of resignation can be of the letter submitted to the board or the date specified in the notice. 
• Also, it can be in effect from the date of cessation as filed in the DIR-12 form, whichever is later.
• When filing the DIR -11 Form, the director must attach the following documents with it:

DOCUMENTS

Resignation Letter

Proof of Dispatch

Acknowledgement Letter by the Company

Other Documents (if asked)

 

Obligation on behalf of the Company

 

• The board of directors must have a meeting with all the directors and discuss the resignation of directors. 
• After that, the board shall pass the resolution for accepting the resignation. Also, it is mandatory to draft the minutes of the meeting.
• The board must also intimate the RoC for the same by filing the DIR-12 form with the prescribed fees of Rs. 300/- within 30 days of acceptance.
• Above all, the resignation of directors must state in the director's report of the next annual general meeting. Above all, it should reflect on the official website of the company.
• When filing the DIR-12 form, the director must attach the following documents with it:

DOCUMENTS

Resignation Letter

Board Resolution / Acceptance Letter

 

That's it! The director is now relieved from all their responsibilities towards the position.

 

 

Frequently Asked Questions

 

Can the resignation of directors reject?

As soon as the director files DIR 11 form, the position becomes vacant. Therefore, it does not require acceptance from the board to take effect.

 

However, in case of any forgery, the resignation may get rejected by the officials.

 

Is the director liable for anything after the resignation?

The director is still liable for everything including the offences that happened during their tenure.

 

However, after the resignation of directors, they are not liable for anything that happens in the company.

 

Can the resignation of directors be withdrawn?

Until the DIR 11 and DIR 12 form files, the director can withdraw the resignation internally.

 

What happens to the capital of the director?

The director still remains the shareholder of the company even after the resignation.

 

For any more information, you can contact our experts at www.starteazy.in