Removal of private limited company director

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AMEEN FARAZ (Querist)

26 December 2012 Hi everyone
I am a director of a private limited company, in the company there are 3 directors and shareholders. One of the directors has misused the powers and shared the confidential files for his personal profit outside the company to the third party. The confidential files was given to our company by a USA based company under non-disclosure agreement to execute the project. The director has agreed the mistake done by him. The other two director want the guilty to be removed from the company but the guilty director is not ready to give the resignation. I want to know how to remove the guilty director without his wish, the guilty director has 20% of shares of the company which he is ready to sell to another person and remaining 80% shares are there with other directors. After the removal of the guilty director from the company, in future the guilty director should be responsible to any problem and losses arises due to leakage of confidential file even if he is not the part of the company.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

26 December 2012 The BOD does not have power to remove a director before expiry of his term of office. Only the company i.e. shareholders can remove a director before expiry of term of his office u/s 284 of the Companies Act. But even then so a special notice to remove him will be required and the director to be removed is entitled to be given an opportunity to make his representation.
Even after removal, the guilty director will continue to be liable for any loss caused to the company for his act. He cannot be absolved of his liability. Wait for other opinions

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