Today we are talking about Resignation of Director in a Company. Companies Act, 2013 has set out a thorough system and proceedings for the resignation of Director, Section 168 of the Companies Act, 2013 handles the procedure for the resignation of the director.The Director of a Company can resign from the Board by filing a resignation letter with the company and filing the intimation with the ROC, As When the Director has to resign he officially needs to submit a letter to the Company to inform about his resignation.
In this article, we look at the procedure for such resignation of Director.
Director’s notice of resignation to the company
A Director may resign from a company by giving a notice in writing to the company and the Board is required to intimate the ROC of such notice within 30 days in Form DIR-12.
The resignation letter that a director will submit for resignation should be in the following format given below :
Director Resignation Letter Format
Date, Month, Year
The Chairman / Secretary
Company Name Private Limited
City, State, Pin Code
Subject: Resignation from the Office of Director of the Company
I hereby tender my resignation from the office of the Director of the Company Name Private Limited with immediate effect or resignation date and request that a notice of my resignation letter is notified to the Registrar of Companies and the Board of Directors to have full information regarding this at the next Board Meeting.
I thank the Board of Director for having given me the opportunity and assistance to discharge my duties during my tenure as Director of the Company.
I request you to please provide me with an acknowledgement of receipt of the resignation and a copy of the e-Form DIR-12 filed with the Registrar of Companies to that effect for my reference and record.
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Director duty when giving resignation
A director has the duty to forward a Copy of his Resignation together with the Detailed Reasons for giving a resignation to the Registrar of companies within 30 days of resignation through the filing of Form DIR.11 with his Digital Signature which makes it necessary for all directors to have Digital Signature under Companies Act,2013.
Companies duty on receiving Directors resignation letter
Once the company receives the resignation letter, and the Chairman of the Board has noted it, a letter must be sent to the resigning Director that his/her resignation letter has been received. The Company must also file with the ROC e-Form DIR-12 about the resignation of the Director of the Company.Once, the ROC is informed, in the subsequent Board Meeting, the letter of resignation of the Director is presented before the Board and the information of resignation would be recorded in the minutes of the meeting.
Liability of Director after the resignation
After a Director has produced his/her resignation and the Board has agreed to the resignation, the Director cannot be held answerable for liabilities incurred by the company after the date of acceptance of resignation. nevertheless, a Director who has resigned will be held liable after his/her resignation for any offences that might have occurred during the tenure as Director of the Company.The Resigning Director is only liable for any non-compliance during his tenure as director and not for anything after his resignation.
Procedure to fill the Dir 11 form :
While Filing DIR 11 Form, one needs to Enter the date of appointment of resigning director in the company.If the director was an alternate director, enter the DIN of the director to whom the appointee is alternate and click Pre-fill button. The system will automatically display the name of the 2 directors to whom the appointee is alternate, Then Enter the date of filing of resignation with the company and also effective date of resignation specified in the notice.The resignation of a director shall take effect from the date on which the notice is received by the company or the date which is specified by the director. The effective date should be same as the date of resignation that is entered in eForm DIR-12 that is filed by the company and It is obligatory to specify the reasons for resignation from the company
It is always a difficult decision to resign as a director of a company, you have to take this decision by keeping in many important factors like life sustainability and what you will do for a living after you resign. If you are planning to resign from a company as a Director then think carefully before doing it as you might regret the decision afterwards. Also when you resign you need to make sure that you do it very professionally, remain productive till your last day at work, leave on a positive note, hold the necessary meeting and fulfil all your corporate responsibilities effectively and efficiently.