As a company’s foundation rests on its directors, you need a competent director to build it, or an insufficient director to break it. Therefore, it is imperative that shareholders are vigilant when it comes to appointing directors. Company directors can be removed before the end of their tenure period under Section 169 of the Companies Act, 2013. Moreover, the removal of director becomes ineffective if the Central Government appoints a director.
Frequently Asked Questions
Who is a company’s director?
Directors are the natural person who is appointed by the Board of Directors for the growth of a company. The collective group of such individual directors is called as the Board of Directors of any company.
2. How many categories of managers are there in a company?
Director categories in a company are Managing Director, Additional Director, Nominee Director, Whole-Time Director, and Independent Director
Directors of a company.
3. How long does a director of a company serve?
It is the responsibility of the different categories of directors to provide different appointment terms, such as Managing Director and whole-time directors have terms of five years, Additional Directors have terms that expire at the next General Meeting, Nominee Directors have terms that expire at the end of the agreement, etc
4. Could a director remove a different director?
Ideally, only shareholders hold the authority to remove directors in private companies, since the Companies Act, of 2013, permits a shareholder to appoint a director. If the constitution permits it, a majority of directors can remove a director from a proprietary company.
5. Before removing a private limited company director, what do you need to know?
The Company must obtain consent from its Board and members before changing its board of directors, as required by a resolution and statutory limit.
6. Upon ending your tenure as a director, what should you do with your shares?
Even after the end of the directorship, a person can hold company shares only if he or she has not subscribed to the shares as a condition of appointment as provided in the area.
7. When a director changes in a company, how are shares assigned?
As soon as the change is effective, the shares of the Company shall be transferred by completing the Share Transfer deed and attaching the stamps based on the rates specified in the Stamp Act of the respective State.
8. What is the first consequence of the Company failing to reply to ROC Notices?
This notice from ROC under section 248(1) is the first step toward striking off the name of the Company. If the Company fails to reply within 30 days of the publication of the notice, the ROC will strike off Company’s name.
9. After the company has been struck off, should the directors be personally liable for noncompliance?
Section 166 outlines the duties directors must follow if the company is struck off. Directors shall be personally responsible for such statutory liabilities if the company is struck off.
10.DIR-12: What are the Consequences of Not Filing?
Failure to file the ‘form DIR-12’ within 30 days of resignation will result in a specific concrete Government fee-penalty
11. Could a director resign by oral means if he or she resigns u/s 168?
In accordance with Section 168, the director may resign by writing. Consequently, oral resignations by directors are not valid.
Read More:
- Removal of Director – Documents, Procedure
- Guidelines for the removal of directors ?
- Removal a Director Through a Process
