The removal of a director

The removal of a director from a company in India is governed by the Companies Act, 2013 and the rules made thereunder. According to the act, a director can be removed by the shareholders or by the Central Government in certain circumstances.

Removal by Shareholders: Shareholders holding not less than 1/10th of the total voting power or at least 100 shareholders holding not less than 1/100th of the total voting power of the company, whichever is lower, can pass a special resolution to remove a director. The special resolution must be passed by a majority of not less than three-fourths of the total voting power of the members present and voting either in person or through proxy.

Removal by Central Government: The Central Government may also remove a director in certain circumstances, such as if the director is found to be guilty of fraud, misfeasance or misconduct in relation to the company, or if the director is disqualified to be a director under the Companies Act.

It is important to note that before removal, the director must be given an opportunity to be heard and the company must comply with the due process of law.

As a CA, it is important to advise the clients on the legal requirements and the procedural aspects for the removal of a director in India and to ensure that all the necessary steps are taken to ensure compliance with the Companies Act and regulations.