RESIGNATION OF THE DIRECTOR

Resignation of Directors under Company Act, 2013 refers to the voluntary relinquishment of the position of a director by the incumbent. The provision of resignation is provided for under Section 168 of the Company Act, 2013 in India. The process of resignation is important as it allows for the position of a director to be filled with a new candidate who is capable and qualified to serve the organization.

As per Section 168 of the Company Act, 2013, a director can resign by giving a notice in writing to the company indicating the reasons for resignation. The notice can be sent via electronic means or through physical delivery to the registered office of the company. The board of directors is required to pass a resolution accepting the resignation at the next board meeting held after the resignation notice has been received.

Any director can resign his office by furnishing a composed notice to the company. After meeting such notification, the Board shall take note of the same, and the enterprise will imply the Registrar in such a way, time, and form as assigned. Given that-

The company will put the instance of such resignation in a report of directors not long after the general social occasion of the company.
The director will likewise private and forward a duplicate of his resignation alongside an exact justification behind his resignation to the Recorder in no less than 30 days of resignation.
The resignation of a director ought to take its impact from the date on which the company acknowledged his notification or from the organized period referenced by the director as the main priority, whichever comes later: Gave that the director who has surrendered ought to be at risk for the offenses which showed up during his residency even after the resignation.
Whenever all directors of a company resign at an indistinguishable time, the advertiser, and the Focal Government select the normal number of directors during which old directors will hold the company till the new is one appointed through the company in a general meeting.

COMMON REASONS FOR THE RESIGNATION OF DIRECTORS:

There can be many reasons behind the resignation of the place director and picking another choice. We should see a few potential reasons for the resignations of directors:

Conflict with the Board -When numerous directors cooperate, a distinction of assessment should occur. It brings about hampering the general exhibition of the company; in such a circumstance, the directors might decide to resign.

Better Career Opportunity -Everybody looks for a superior professional chance to extend their space, and pick that choice that drives their internal competitor. Likewise, the directors might resign if they get better public doors or some endeavor wherein they got appointed as a director by AOA.

Bending in the Company Undertakings- When a director gets to know the unlawful acts of the company, he might wind up getting hauled into it which turns into his justification behind the resignation. To shield himself from individual obligations emerging from such exercises, he chooses to resign.

Removal because of disobedience– Any non-adherence, negation, or defaults on the director’s end can lead to inconvenience. In that sort of situation, the Board may believe he should resign from the workplace. At times the evacuation of the director might shape the essence of resignation in which the company gives the director an advantage to resign as opposed to tossing him out straightforwardly.

Withdrawal of nomination– It is simply relevant to the Chosen directors who generally get designated by the NBFC’s financial backers on the Body. Once the transaction amid company and substance is finished, the Chosen one director can resign, or he may likewise resign after the withdrawal of the assignment.

PROCESS OF RESIGNATION OF DIRECTOR:

Step 1 – Notice of Resignation: A notification or resignation letter must be served by the Director to the company referencing about the Resignation. The Resignation ought to be sent by email or in printed version to different directors of the company
Step 2 – Acknowledgment of Resignation by the company: The Company needs to assemble a Board Conference to the acknowledgment of Resignation offered by the Director and to pass a resolution in the Executive Meeting.
Step 3 – Filing DIR 12 Form: DIR-12 Form needs to record with ROC the data of the resignation Director in the span of 30 days of acknowledgment. When DIR12 is documented, the director’s name is eliminated from the records of the Service of Corporate Undertakings.
Step 4 – Filing DIR 11 Form: Director needs to record Form DIR 11 for the situation of his Resignation to ROC within something like 30 days of the resignation.

The company is obligated to file a return in Form DIR-12 with the Registrar of Companies within thirty days of the acceptance of the resignation. The return must contain all relevant details, including the name of the director who has resigned, the effective date of resignation, and the reason for resignation. Failure to file the return can attract penalties for the company.

Resignation of directors can occur for various reasons. Personal reasons such as ill-health, age, and family reasons are common. The director may also resign due to changes in the company’s structure or business model, change of career paths, or a better opportunity elsewhere. It is important for a director to comply with the necessary legal requirements while resigning to avoid any legal consequences.

In conclusion, the provisions of the Company Act, 2013 regarding the resignation of directors provide a mechanism for ensuring that companies have a qualified and capable board of directors. A properly executed resignation process ensures that companies continue to operate smoothly and efficiently without any disruption.