Resignation of director from a private company

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Supremo Vinod Shah

Adviser

52 Points Posted on 14 November 2018

Dear Experts,

My wife is Full-Time Director of a Private Limited Company (Startup) where only two Full-Time Directors in the Company. She noticed that another Director is involved in some suspicions or unscrupulous practices in the affairs of the company including irregularities in the Company's bank account. She asked him to submit an explanation for his all malpractices but he is not responding well and creating unwanted arguments.

Now in the sake of future of her Directorship credentials, my wife wants to leave Company by tendering resignation.

We have contacted many CAs to take advice on this issue but did not find the proper solution as some of CAs are saying that she can't resign from the Private Company until the appointment of a full-time Director.

Kindly guide us exact procedures how can she leave this Company from here full-time Directorship and selling her shares...?

We shall be highly obliged for your quick and proper advice on this matter.

Replies (3)

CA Sunil Kumar

Chartered Accountant

4524 Points Posted on 14 November 2018

You need to submit you resignation letter with the Company stating the facts, which includes why you are resigning and from when.

If Company have only 2 Directors they need to appoint one before accepting your resignation so as to comply with the rules as per Companies Act.

Form DIR-12 need to be filed by the Company and DIR-11 need to be filed by you on MCA site.

Vibha Trivedi

437 Points Posted on 14 November 2018

Sir,

Your wife can resign from her office by giving a notice in writing to the company under section 168 of the Companies Act, 2013.

Now it is the Company's responsibilty to file DIR 12.

Filing of Form DIR 11 is now optional. Your wife may or may not file Form DIR 11 with the ROC.If the company does not file DIR 12 although it is mandatory, your wife should file DIR 11 although it is not mandatory.

Further there is no condition attached to resignation of director in case of a private company with two directors that the resigning director first appoint one new director and then give his/her resignation.

In case there is only one director left on the board he can act to increase the no. of directors to that fixed for the quorum.