Removal of Director

Pvt ltd 114 views 2 replies

kings22

Shareholder

167 Points Joined March 2019

Scenario

1- PVT Limited Company with 4 Directors and 5 Shareholders (4 of the shareholders are also directors)

2- Total 3 Directors hold 99.6% shares (9996/10000). The Director 4 holds 0.02% share (2 / 10000)

The three directors want to remove the 4th Director for simplification of company operations as business has been very bad. The fourth director is refusing to resign which no clear reasons.

1- What can be done to remove the 4th Director ?

2- Company Board Meeting is coming up in few days, can any action be taken by majority directors in this board meeting?

3- Company AGM is also coming 25 days after Board meeting, can any action be taken by majority directors in the AGM meeting to remove?

Thank you for your help.

Replies (2)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9157 Points Joined December 2011

Procedure for removal of Director in Private Limited Company

A Company has the power to removal of Director by passing an Ordinary Resolution, given the Director was not selected by the Central Government or the Tribunal.
A Board Meeting will be called by giving seven days’ notice to every one of the Director. A special notice will go to the Director Notifying them about the removal of the Director.
Upon the arrival of the Board Meeting, a determination for the holding of an unprecedented general gathering will be passed alongside the determination for the evacuation of the Director subject to the endorsement of the investors.
A general gathering will be held by giving 21 days clear notice. In the gathering, the individuals will be requested to vote on the issue. In the event that the greater part is agreeable to the choice, the determination will be passed.
Prior to the passing of the determination or resolution, a chance of being heard will be given to the executive.
After the passing of the determination or resolution, a similar methodology will be taken after, and the structures DIR – 11 and DIR – 12 will be documented alongside similar connections of the Board Resolution, Ordinary Resolution.
After the documenting of the structures, the name of the Director will be struck off from the Ministry of Corporate Affairs site.