In addition to being referred to as ‘reasonable cause, the clause requires the firm to act reasonably when terminating a director. As a result of the Companies Act, an Article that contains such a clause must meet certain requirements. Those requirements, as well as the principles of good corporate governance, govern the law of removal of directors.
A Procedure for Removing a Director
Table of Contents
Through the implementation of policies and decisions that benefit the company and its shareholders, the Board of directors manages the company’s day-to-day operations and serves its shareholders. Companies Act provides them with certain rights and regulates how directors can be appointed and resigned.
- In order to apply for the removal of a director, members must notify the company at least 14 days before the meeting, excluding the date of notification and the date of the meeting.
- If the company has received more than $5,000,000 from shareholders as of the record date, shareholders may send a special notice to the company.
- It is the company’s responsibility to notify the relevant directors as soon as possible following receipt of the resolution proposal
- According to Section 169 of the Companies Act, 2013, directors who wish to be dismissed must inform the association in writing and request that it be sent to all members of the association.
- The association must inform its members if a reasonable written notice of dismissal is received before the meeting.
- In addition, he must send a copy of the resolution proposal to all members as soon as the statement is received
- A general meeting may be held, ordinary resolutions may be passed, and directors may be dismissed.
Examining the Law of Director Removal
- With a clear understanding of the director’s removal process, let’s look at the laws that support it
- Notice of Special Interest
- The law requires special notice of any resolution to remove or appoint a director under this section at the meeting at which he is removed.
- The first step to the removal of a director is outlined in subsection 2, and subsection 5 requires the appointment of an individual to replace the removed director.
- In accordance with Section 115 of the Companies Act 2013, a company has to give members special notice if they hold more than one percent of the company’s total voting powers on Central government has issued a prescription for the amount paid upon shares is * 5 lakhs or more. The method for notifying the members of the resolution also has been set by the government.
The Director is Entitled to be Heard
A copy of the resolution to remove a director under this section shall be sent immediately to the director concerned upon receipt of notification under law 169 (3). The director is entitled to be heard at the meeting on the resolution, whether or not he is a member. removal of director in private limited company
Under subsection , a company must follow certain steps to remove a director. A director must be notified immediately of a resolution to remove him or her, and the company must allow the director to attend the meeting after receiving a copy. It is not specified what the word ‘forthwith’ means, but to determine if a delay occurred, the company must take immediate action, without deliberate delay in compliance.