Vacation of director from office

30th March 2015

Dear Members

Section 167(1)(b) stipulates that the office of a director shall become vacant in case he absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board. In this connection I request you to kindly clarify the following:

The term "twelve months" - Does it refer to calendar year OR financial year OR from the date of commencement of the new act OR from the date of last board meeting attended by such director.

A closely held public limited company has seven directors. One of the Directors is based in USA. He has not attended any board meeting for the past five years. The company is obtaining leave of absence request letter and the Board is granting leave of absence to him. The last board meeting for the year 2014-15 was held on 28th January 2015.

If the provision of Section 167 is applied then the above said Director will be vacating the office. My query in this regard is From which date such director will be vacating the office and what are the forms to be filed by the company with MCA / ROC.

Kindly advise.

with regards

Murali

1) Ther term used here is 'twelve months' and not 'year'. Hence the question of calendar year or financial year does not arise.

2) Twelve months period should be counted from the date following the date of the last Board meeting attended by the director.

3) This provision has come into force from 1.4.2014. Since the director has not attended any Board meeting during 2014-15 his office will be vacated.

4) In the given case the last Board meeting was held on 28.1.2015. However, the company could hold Board meeting even on 31.3.2015 at short notice in case of urgent issue. Hence one coould presume that his office will be vacant on 31.3.2015.

5) DIR-12 needs to be filed with ROC within 30 days.