This article is authored by Tajriyaan Akram Hussain, Associate, Lead, Corporate Secretarial department, Mahbub & Company.
Where the Director Resigns Voluntarily
This is usually the simplest route. The director decides to step down, and the company records the resignation through a Board decision and the required RJSC filing.
- Resignation letter: The director submits a written resignation to the Board of Directors.
- Board resolution: The Board meets and passes a resolution accepting the resignation.
- RJSC filing: The company notifies the Registrar of Joint Stock Companies and Firms (RJSC) by filing Form XII within 14 days. If a replacement director is appointed, Form IX should also be filed for that new director.
Where a Nominee Director is Replaced
A director may also have been appointed to represent a particular shareholder or investor. In that case, the appointing shareholder may withdraw the nomination and nominate another person. The company can then record the change through the appropriate Board and RJSC steps, subject to its constitutional documents and any applicable shareholder arrangements.
This route can be faster than a shareholder-led removal, but it may not be suitable if the director contests the change, the Board cannot validly meet, or the company’s documents require shareholder approval.
Where Shareholders Remove the Director
If the director does not resign and the Board route is not available, shareholders may remove the director under Section 106 of the Companies Act 1994. This requires an Extraordinary Resolution, passed by a three-fourths majority of the shareholders present and voting at the meeting, together with compliance with the required notice, quorum and meeting procedures.
Why Procedural Accuracy Matters
Once the internal decision has been taken, the company must complete the relevant RJSC filings so that the official company records reflect the change.
Director removal is not only an internal corporate decision; it is also a compliance matter. If the company skips a required approval, fails to meet quorum requirements, uses the wrong filing, or misses a filing deadline, the removal may be challenged and the company’s records may become inconsistent. A carefully managed process helps protect the validity of the change with the authorities and gives shareholders, counterparties, and regulators confidence in the company’s leadership structure.
