Director resignation effective date

Dear Suraj

Thanks for replying. Could you please explain the reason for your answer. As Companies Act is silent and AOA provides for BOD approval. Why it would be from the date of resignation?

The above answer is not posted by me. Some Fake profile doing rounds in CA club

As the Act is silent over resignation of director, the resignation is effective from the date of the resignation lettre i.e., the date on which the director clears his intention to resign from the position of director.

Further as a good corporate governance, the resignation letter is placed before the Board for taking note of resignation of directorby the remaining directors, which is only a formality.

Experts please correct me, if I am wrong.

Thanks & Regards

Priya 

Originally posted by : Priya Sharma
	As the Act is silent over resignation of director, the resignation is effective from the date of the resignation lettre i.e., the date on which the director clears his intention to resign from the position of director. Further as a good corporate governance, the resignation letter is placed before the Board for taking note of resignation of directorby the remaining directors, which is only a formality. Experts please correct me, if I am wrong.   Thanks & Regards Priya

Dear Priya

I endorse your views but here catch is that AOA says that Board must approve it? Now, when shall it take effect?

If AOA says so, then it will be effective only on acceptance of the same by board. 

Yes, as the Companies Act 1956 is silent about resignation of Board members, it has been clarified through various Court decisions, that AOA provisions on this, if any, is applicable.

So, 30 days will be counted from date of Board Meeting where the resignation is accepted.

Note, Companies Bill 2012 contains detailed provision about resignation of Directors.

Regards,

I Concur with priya on this. The resignation is effective from the date mentioned in the resignation letter as effective date. The intent has to be obtained from the tenor of the letter which usually specifies the effective date. Although consent of the Board is required, the effective date shall be date mentioned in the resignation letter unless otherwise provided in the letter. The director cannot be held responsible for any acts or omissions subsequent to the date of his resignation although the same is not accepted by BOD

Since Compani Act, 1956 does not contain any specific provision regarding effective date of resignation, provisions of AOA shall prevail.

Thus, the resignation shall take effect from the date of approval by Board.