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Removal and appointment of directors

Ajil Salam A (Partner) (25 Points)

22 January 2019

Hai Friends

Please guide me on the following situation.

My private limited company have 5 share holders out of which 3 of them are directors. Now i want to remove 4 shareholders including 2 director and want appoint 1 person as new shareholder and director.

what are the forms needed to file with ROC and the procedure for the same.

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3 Replies

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 22 January 2019

Section 115 of Company Act 2013

A special notice with the intention of removing a director by the specified no. of members of the company has to be passed at least before 14 days before the concerned meeting at which it has to moved excluding the day on which the notice is served and the day of the meeting.

A special notice required to be given to the company shall be signed, either individually or collectively by such number of members holding not less than one percent of total voting power or holding shares on which an aggregate sum of not more than five lakh rupees has been paid up on the date of the notice.

Notice to Members

The company shall immediately; after it has received the notice should inform its members by a notice of resolution in the same way it does at the time of a general meeting. (At lest 7 Days of the Meeting)

If it is not possible for the company to send notice to all the members, it should publish it in form of an advertisement in a newspaper having an appropriate circulation at least before 7 days of the meeting.

Intimation to Concern Director

Company should give intimation to the concern director about his removal.

Right to Heard

The director will have the right to be heard on the resolution at the meeting. Opportunity can be given to the director he can submit his statement in writing against his removal from company.

Intimation by Company to all shareholders:

If time permitted then

Send notice to its members clear 7 days before of the meeting along with copy of representation copy.

If time not permitted then

If notice not able to reach to all members of company then notice shall be published in English language in English newspaper in the state where the registered office of the company and need to publish on website too. (at least 7 clear days before the meeting)

Resolution required to be filed with ROC as per Companies Act 2013

Every Special Resolution is required to file with ROC in e-from MGT-14 within 30 Days of passing of resolution.

CONSEQUENCES OF NOT FILING OF FORM MGT-14:

If the company not filed the board resolution in e-form MGT 14 within 30 days of passing of Resolution, then penalty will be applicable as follows;

Upto 15 Days then One time of actual Govt Fees

More then 15 Days – 30 Days then 2 times of Actual Govt Fees

More then 30 Days – 60 Days then 4 times of Actual Govt Fees

More then 180 Days then 10 times of Actual Govt Fees

Govt can punishable fine which Shall Not Be Less Than Five Lakh Rupees but Which May Extend To Twenty Five Lakh Rupees.

Appointment of Director in Casual Vacancy

A casual vacancy will be created as existing director are going to remove, with help of special notice he can be appoint by company in general meeting or by the Board Meeting. A director so appointed shall hold office till the date he had not removed.

Every new director appointment/Resgination is required to file DIR – 12 within 30 Days of passing of resolution.

CONSEQUENCES OF NOT FILING OF FORM DIR-12:

If the company not filed the e-form DIR-12 within 30 days of appointment/Resignation, then penalty will be applicable as follows;

Upto 15 Days then One time of actual Govt Fees

More then 15 Days – 30 Days then 2 times of Actual Govt Fees

More then 30 Days – 60 Days then 4 times of Actual Govt Fees

More then 180 Days then 10 times of Actual Govt Fees

If company fail to file DIR 12 within 300 Days from date of passing resolution then company need to pay 12 times of Actual Govt Fees plus Compounding offence

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