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Introduction to Resignation of director

The resignation of a director is an official process that allows a director to step down from their position in a company. As per the Companies Act, 2013, a director can resign at any time by submitting a formal resignation letter to the board of directors. The resignation becomes effective once accepted by the board, and the company must inform the Registrar of Companies (RoC) within 30 days. The director must ensure that they comply with all legal requirements, including the filing of the resignation notice and any necessary documents, to avoid future liabilities.

It is essential for the company to update its records and hold a board meeting to formalize the resignation. In some cases, the resignation may be subject to conditions, such as the settlement of pending obligations or responsibilities.

At Tax India Helpline, we provide expert guidance to both directors and companies to ensure the resignation process is completed efficiently and in compliance with legal regulations, safeguarding both parties’ interests and maintaining corporate governance standards.

Benefits of Filing Director Resignation Properly

Legal Disassociation

Upon resignation, the director is formally released from any further decision-making or operational control of the company. This ensures clear legal separation from the company’s liabilities or actions post-resignation.

Compliance with Companies Act

Filing resignation as per Section 168 of the Companies Act, 2013, ensures statutory compliance. It prevents regulatory defaults and protects the company and director from penal consequences.

Prevention of Future Liabilities

A proper filing with the ROC ensures that the resigning director is not held accountable for company affairs after resignation. It acts as a legal safeguard against future financial or legal claims.

Corporate Transparency

Updating the ROC and internal records reflects good governance. It strengthens investor and stakeholder confidence through transparent and timely disclosure.

Record Maintenance with MCA

Filing DIR-12 with the ROC ensures that the change in directorship is accurately updated in the MCA’s official records. This helps in maintaining a credible and up-to-date corporate profile.

Dispute Prevention

A properly documented and reported resignation reduces the risk of future disputes with the company. It provides legally admissible proof of the director’s exit from official responsibilities.

Documents Required for Resignation of director

Resignation Letter(A formal letter addressed to the company’s board.)

Board Resolution(Resolution passed by the board accepting the resignation.)

Form DIR-11(Filing of resignation details with the Ministry of Corporate Affairs (MCA).)

Form DIR-12(Intimation of director resignation by the company to the MCA.)

Acknowledgment from Company(Confirmation from the company accepting the resignation.)

Updated List of Directors(Reflecting the resignation in company records.)

No Objection Certificate (NOC)(If required, from shareholders or other directors.)

Step-by-Step Guide for Resignation of Director

Draft and Submit Resignation Letter

We assist in drafting a formal resignation letter and submitting it to the Board of Directors for approval.

Conduct Board Meeting & Pass Resolution

Our team ensures that a Board Meeting is held where the resignation is formally accepted through a board resolution.

File DIR-11 with ROC

We help the resigning director file Form DIR-11 with the Registrar of Companies (ROC), including resignation details and supporting documents.

Company’s Filing of DIR-12

Our experts ensure that the company files Form DIR-12 within 30 days of resignation to update the official records.

Settle Financial & Legal Obligations

We guide directors in clearing pending liabilities, responsibilities, or ongoing compliance obligations before resignation.

Obtain ROC Acknowledgment

Once approved, we help obtain an ROC confirmation that officially updates the company’s records regarding the director’s resignation.

Deadlines and Penalties

Avoid compliance issues by meeting key timelines and filing obligations.

Director’s Resignation Notice (DIR-11)

he resigning director must file Form DIR-11 with the Registrar of Companies within 30 days from the date of resignation. Failure to file can lead to a penalty of ₹500 per day, up to a maximum of ₹50,000

Board Resolution and Filing by Company (DIR-12)

The company is required to file Form DIR-12 with the RoC within 30 days of receiving the resignation. Non-compliance attracts financial penalties and can lead to legal complications.

Disclosure in Board’s Report

The details of the resignation must be disclosed in the Board’s Report in the next Annual Return. Failure to report may affect company transparency and invite scrutiny from authorities.

Ongoing Liabilities for Resigned Directors

Even after resignation, a director can be held liable for acts committed during their tenure. Not updating records timely may lead to continued liability in legal or financial proceedings.

Frequently Asked Questions

What is the procedure for a director’s resignation?

A director must submit a written resignation to the company, which should be accepted by the board. The company must then file Form DIR-12 with the Registrar of Companies (ROC) within 30 days to formalize the resignation.

Is board approval necessary for a director’s resignation?

No, a director can resign at any time by giving notice to the company. However, the board must acknowledge the resignation in a board meeting and update the ROC records accordingly.

What documents are required for a director’s resignation?

Key documents include the director’s resignation letter, board resolution accepting the resignation, and Form DIR-12. The resigning director may also file Form DIR-11 with the ROC as proof of resignation.

Can a company refuse to accept a director’s resignation?

No, once a director submits their resignation, it becomes effective from the date mentioned in the resignation letter or upon receipt by the company. The company cannot refuse to accept a valid resignation.

What are the liabilities of a director after resignation?

A resigned director remains liable for any decisions made during their tenure. However, they are not responsible for actions taken by the company after their resignation is officially recorded.

How can a director ensure their resignation is properly recorded?

To safeguard their interests, a director should file Form DIR-11 with the ROC along with a copy of the resignation letter and proof of delivery to the company. This ensures a legal record of resignation.

For professional assistance in director resignation procedures, contact our legal experts today!

Can a director resign at any time?

Yes, a director may resign at any time by giving a written notice to the company. The resignation becomes effective from the date mentioned in the notice or the date the company receives it, whichever is later.

Is it mandatory to file resignation with the ROC?

Yes, the company must file Form DIR-12 with the Registrar of Companies (ROC) within 30 days of the resignation to ensure compliance with Section 168 of the Companies Act, 2013.

Does a director need to file any form personally?

While not mandatory, the resigning director may choose to file Form DIR-11 as a record of resignation. This provides additional legal protection, especially if the company delays or fails to file DIR-12.

What happens if the company does not file DIR-12?

If the company fails to file DIR-12, it may face penalties, and the resignation may not be reflected in the MCA records. This could lead to complications for the resigning director in the future.

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