Generally, the Board of Directors of a company acts as an agent for the management of the company as a whole, working on behalf of its shareholders and shareholders as a whole. As a result of the Companies Act, of 2013, they now have certain powers to manage the company effectively. Among these important powers is the ability to remove a director from office.

Are Directors Removable on What Grounds?

A director can be removed from his/her position by the shareholders for the following reasons:

  • A director who has become insolvent
  • A director was convicted of a crime and sentenced to at least 6 months imprisonment.
  • In the event that a court has declared the director unsound of mind.
  • The Tribunal or Court disqualifies the director from holding such a position
  • There is no Director Identification Number on file for the director
  • Non-compliance with Companies Act, 2013 guidelines

Is There a Mandatory Requirement for Removal?

  • It is necessary to issue a special notice for the removal of a director
  • Individuals or groups must sign the special notice
    • Members holding at least one percent of the total vote may vote,
    • The notice applies to members who have paid an aggregate amount of at least *5 lakhs on their shares.
  • Board members shall not re-appoint the removed director as a director.
  • An outgoing director’s vacancy shall be filled at the same general meeting in which the director is removed by appointing a new director removal
  • Newly appointed directors will hold office until the expiration of the term of their predecessors

Is There a Penalty for Not Filing Form Dir-12 on Time?

After a board resolution is passed for the removal of a director, companies are required to submit form DIR-12 to the Registrar of Companies within 30 days. The company may have to pay huge penalties if the form is not submitted within the specified time.

When a company delays submitting Form DIR-12

  • 2 times the standard fee shall be paid by the company up to 30 days
  • It is mandatory for the company to pay four times the standard fee if it takes more than 30 days and up to 60 days
  • In the event of a delay of more than 60 days up to 90 days, the company shall pay 6 times the standard fee
  • If the company takes longer than 60 days up to 90 days, it shall pay six10 times the standard fee
  • If more than 180 days have passed, the company will be charged 12 times the standard fee.


It is a delicate process to remove a director and must follow the procedure prescribed by the Companies Act,2013. Failure to do so could result in the decision being ruled invalid if appealed in court. Companies can opt to hire professionals like Vakilsearch in order to avoid such a situation, as well as penalties for non-submissions. With the help of Vakilsearch, you can speed up the removal process, draft resolutions, submit mandatory forms on time, and even file them with the RoC.

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