Resignation of Director
Resignation of Director – Process & Compliance with Cardiff Service
A Director may resign from their office at any time. However, if the Director has a service contract with the company (e.g., Managing Director, Whole-Time Director), the resignation must comply with the terms and conditions mentioned in the contract.
The Companies Act, 2013 (Section 168) lays down the procedure and legal requirements for resignation of a Director.
Step 1: Resignation in Writing – Section 168(1)
A Director must give a written notice of resignation to the company.
Email or fax is also considered valid written communication.
The resignation should be addressed to the Registered Office of the Company.
Once received, the Board shall take note of it and inform the Registrar of Companies (RoC) in compliance with Rule 15 of the Companies (Appointment & Qualification of Directors) Rules, 2014.
The company must:
✔ File Form DIR-12 within 30 days.
✔ Update its website (if applicable) regarding the resignation.
Step 2: Forwarding Copy to Registrar – Section 168(1) Proviso
As per the Companies (Amendment) Act, 2017, a resigning Director may also file a copy of their resignation with detailed reasons to the RoC in Form DIR-11, within 30 days of resignation.
This ensures that the resignation is duly recorded at both company and regulatory levels.
Step 3: When Does Resignation Take Effect? – Section 168(2)
The resignation becomes effective:
✔ From the date on which the company receives the notice, OR
✔ From the date specified by the Director in the notice (whichever is later).The Board must record the resignation in its minutes.
Step 4: Liabilities After Resignation
Once resignation is communicated and received, the Director is not liable for future acts of the company.
However, the Director remains liable for any acts committed during their tenure.
Filing of Form DIR-11 is optional after amendment, but advisable for personal record and proof.
Step 5: Resignation of All Directors – Section 168(3)
If all Directors resign, the Promoters or Central Government must appoint the required number of Directors to run the company.
Until new appointments are made, the resigning Directors must continue to hold office to ensure smooth functioning.
Features of Director Resignation
At Cardiff Service, we simplify compliance with the provisions of the Companies Act, 2013 and related rules, ensuring proper execution of a director’s resignation.
Key Highlights:
Legal Provisions
Section 168 and Rule 15 & 16 of the Companies (Appointment and Qualification of Directors) Rules, 2014 govern the process of Director Resignation.
Resignation by Notice
A Director may resign by giving a written notice to the company.
The Board of Directors must acknowledge and record the resignation.
The company must file Form DIR-12 with the Registrar of Companies and note the resignation in the Board Meeting.
Director’s Filing with Registrar
The resigning Director may also forward a copy of the resignation with reasons to the Registrar in Form DIR-11.
Effective Date of Resignation
The resignation takes effect from the date specified in the notice or the date the company receives it, whichever is later.
Liability of Director
The Director remains liable for any offences that occurred during his/her tenure, even after resignation.
Reporting in General Meeting
The fact of the Director’s resignation must also be reported in the Board’s Report, which is presented at the next General Meeting of the company.
Documents Required for the Resignation of Director in a Company
When a Director decides to resign, certain documents must be prepared and submitted to ensure smooth compliance with the Companies Act, 2013. At Cardiff Service, we help you prepare and file all necessary paperwork with accuracy and timeliness.
List of Documents Required
Notice of Resignation
Formal resignation letter submitted by the Director to the company.
Evidence of Cessation
Proof confirming that the Director has officially ceased to hold office.
Certified Copy of Board Resolution
A Board Resolution passed by the company noting and accepting the Director’s resignation.
Copy of Minutes of the Board Meeting
Extract of Board Meeting minutes recording the acceptance of the Director’s resignation.
Email ID of the Resigning Director
Contact details required for future communication and ROC filings.
Confirmation Statement
A declaration confirming that the resigning Director/Managing Director is no longer associated with the company, along with the effective date of cessation and reason for resignation.
Step-by-Step Procedure
1. Forward Resignation Letter to the Company
The Director must submit a written resignation letter to the company.
The letter should clearly state the reasons for resignation.
2. Verification by the Company
The company must check whether the resignation letter has been duly received.
Verify details such as the date of resignation and the reasons mentioned by the Director.
3. Acknowledgment of Resignation
The company should formally acknowledge the resignation of the Director.
An intimation must also be sent to the concerned Director.
4. Taking Resignation on Record
The resignation must be officially noted in the Board Meeting.
A resolution is passed to record the resignation.
5. Filing of e-Form DIR-11 with ROC
The resigning Director must file Form DIR-11 with the Registrar of Companies within 30 days of resignation.
The form should include a copy of the resignation letter and the stated reasons.
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