Removal of Director Under Companies Act 2013: Process & Forms

Removing a director is one of the more sensitive corporate actions a company can take. It affects control, it affects the company's public record on the MCA portal, and — if the procedure is not followed exactly — it can be challenged and set aside, leaving the company worse off than before.

This guide explains how a director can be removed from a company in India under the Companies Act, 2013: the shareholder route under Section 169, automatic vacation under Section 167, resignation under Section 168, and removal by the Tribunal. It covers the special notice requirement, the removed director's right to be heard, the exact ROC forms (DIR-11 and DIR-12), documents, fees, timelines and the mistakes that most often invalidate the process.

It is written for promoters, shareholders, directors, company secretaries and founders of private limited companies dealing with a non-performing director, a disqualified director, a co-founder exit, or a board deadlock.

What is Removal of a Director?

Removal of a director means ending a person's directorship before the natural expiry of their term, through a defined legal process — as distinct from resignation (where the director leaves voluntarily) or retirement by rotation (where the term simply ends).

Under Indian company law there are four distinct exit routes, and they are often confused:

The one that people mean when they say "removal of director" is almost always Section 169 — removal by an ordinary resolution of the shareholders in a general meeting.

Where and when it is used

• A director stops attending board meetings or discharging duties
• A co-founder exits and refuses to resign voluntarily
• A director's conduct conflicts with the company's interest
• A nominee director is withdrawn but does not step down
• The board composition is being restructured after an investment or acquisition

Key Requirements and Conditions for Removing a Director

Requirement 1: A valid special notice from qualifying members

A resolution to remove a director requires a special notice under Section 115. It must be signed by:

• Members holding not less than 1% of total voting power, or
• Members holding shares on which an aggregate sum of not less than ₹5,00,000 has been paid up as on the date of the notice

The notice must reach the company not earlier than three months and not later than 14 clear days before the meeting at which the resolution is to be moved (excluding the day of receipt and the day of the meeting).

Requirement 2: The director must be given a reasonable opportunity of being heard

Section 169(1) is explicit: removal is permitted "after giving him a reasonable opportunity of being heard." The company must send the director a copy of the special notice immediately on receipt, and the director is entitled to be heard at the meeting whether or not they are a member of the company.

Requirement 3: The correct type of resolution

• Ordinary resolution for a director in the normal course
• Special resolution for an independent director who has been reappointed for a second term under Section 149(10)

Requirement 4: The director must not fall within a protected category

Section 169 does not apply to:

• A director appointed by the National Company Law Tribunal under Section 242
• Directors appointed under the proportional representation system, where the company has adopted Section 163 to appoint at least two-thirds of its directors that way

Also confirm that removing this director will not take the board below the statutory minimum, and that at least one director remains who has stayed in India for 182 days or more in the financial year, as required by Section 149(3).

How Does the Removal Process Work? Step-by-Step

Step 1: Receive and verify the special notice

Members meeting the 1% voting power or ₹5,00,000 paid-up threshold sign and deliver the special notice at the registered office. The company must verify the signatories' shareholding as on the date of the notice, and check that the notice arrives within the three-month to 14-clear-day window.

Step 2: Convene a board meeting and notify the director

Issue at least seven days' notice for a board meeting. At that meeting, the board takes note of the special notice, resolves to convene a general meeting (EGM or AGM), approves the notice and explanatory statement under Section 102, and authorises a director or the company secretary to issue it.

Critically, the company must immediately send a copy of the special notice to the director concerned. This is not optional and it is the step most often skipped.

Step 3: Handle the director's written representation

If the director sends a written representation of reasonable length and requests that it be circulated:

• The notice of the meeting must state that a representation has been made, and
• A copy must be sent to every member to whom notice of the meeting is sent

If the representation is received too late, or the company fails to send it, the director may require it to be read out at the meeting. The director retains the right to speak on the resolution regardless.

The company may apply to the Tribunal if it believes the right is being abused to secure needless publicity for defamatory matter — but it should not simply suppress the representation on its own assessment.

Step 4: Serve notice of the general meeting and hold the meeting

Serve at least 21 clear days' notice of the general meeting on all members, directors and auditors (shorter notice is possible with the consent prescribed under Section 101). At the meeting, the director is given the opportunity to be heard, and the resolution is put to vote. An ordinary resolution requires a simple majority of votes cast.

Step 5: File DIR-12 with the Registrar within 30 days

Within 30 days of the resolution being passed, file e-Form DIR-12 with the ROC, selecting the reason "removal", and attaching the certified true copy of the resolution and supporting documents. Once approved, MCA master data is updated and the removal is complete on the public record.

If the vacancy is being filled at the same meeting, the appointment of the new director can be made there — provided special notice of the intended appointment was also given — and reflected in the same DIR-12. A director removed under Section 169 cannot be reappointed by the Board to fill the resulting casual vacancy.

Related point: if the director instead resigns, they file DIR-11 themselves with a copy of the resignation letter, and the company files DIR-12. DIR-11 is a resignation form — it is not used for removal by the company.

Documents Required

Requirement 1: The special notice and shareholding proof

The signed special notice under Section 115, along with evidence that the signatories held the required 1% voting power or ₹5,00,000 paid-up value as on the date of the notice — usually an extract of the register of members.

Requirement 2: Board and general meeting records

Notice and certified true minutes of the board meeting; notice of the general meeting with the explanatory statement under Section 102; attendance sheet; and the certified true copy of the ordinary resolution (or special resolution for a second-term independent director) removing the director.

Requirement 3: Correspondence with the director concerned

Proof that the special notice was sent to the director, any written representation received, and evidence of circulation of that representation to members or of it being read at the meeting. This is the file that protects the company if the removal is later challenged.

Requirement 4: Filing documents

DIR-12 with: the certified true copy of the resolution, the notice of the meeting, evidence of cessation, the DIN of the outgoing director, and the digital signature of a director or key managerial personnel, along with professional certification where required. If a new director is appointed simultaneously, add their DIR-2 consent, DIR-8 declaration of non-disqualification, DIN and identity/address proof.

Update the Register of Directors and KMP under Section 170 and the register of directors' shareholding after filing.

Benefits of Following the Correct Removal Procedure

Benefit 1: The removal is legally sound and hard to challenge

A removal supported by a valid special notice, documented service on the director, a circulated representation and a properly minuted meeting is very difficult to overturn. Most successful challenges are procedural, not substantive.

Benefit 2: The public record matches reality

Once DIR-12 is approved, MCA master data, banking mandates and statutory registers can all be aligned. Third parties dealing with the company are on notice, and the company's exposure to acts done by the former director in its name is reduced.

Benefit 3: Liability is cleanly delineated

A dated, filed cessation gives a clear boundary between the period the director was responsible for and the period after. This matters in every subsequent tax, GST, EPF or regulatory proceeding.

Benefit 4: Governance disputes stay contained

Handling a removal correctly — including allowing the representation — significantly reduces the likelihood of an oppression and mismanagement petition under Sections 241–242, which is a far costlier and slower fight than the removal itself.

Benefit 5: Due diligence stays clean

Investors, acquirers and lenders review board history during diligence. A cessation with a full paper trail is a non-issue; an undocumented one becomes a disclosure item and a negotiating point.

Costs, Fees and Charges

There is no separate government fee for the removal itself. The costs are:

1. DIR-12 filing fee — slab-based on the company's nominal share capital:

Companies without share capital pay a flat ₹200.

2. Additional fee for late filing — beyond the 30-day window, additional fees apply on a slab basis and can reach 12 times the normal fee for long delays.

3. Professional charges — drafting the notices, explanatory statement, minutes and resolutions, and professional certification of DIR-12, are billed separately by the CS or CA.

4. Contingent costs — if the removal is contested and moves to the NCLT under Sections 241–242, legal costs will dwarf every other item above. This is the strongest financial argument for following the procedure precisely the first time.

Fee slabs are revised from time to time — verify the current rates on mca.gov.in before filing.

Practical Examples and Use Cases

Example 1: The absentee co-founder

Two of three founders of a private limited company want to remove the third, who has not attended a board meeting in over a year. They hold 70% of the shares. They issue a special notice, send a copy to the third founder, receive and circulate his written representation, hold an EGM on 21 clear days' notice where he speaks, and pass an ordinary resolution. DIR-12 is filed within 30 days. The removal stands.

Example 2: Automatic vacation instead of removal

A director has not attended any board meeting for twelve months. Under Section 167(1)(b), the office is vacated automatically — no shareholder resolution is required. The company simply files DIR-12 recording the vacation, citing the relevant clause. Running a full Section 169 process here is unnecessary work.

Example 3: Nominee director withdrawal

An investor withdraws its nominee director following an exit. The cleanest path is a resignation under Section 168 — the nominee files DIR-11 and the company files DIR-12. Removal under Section 169 is the fallback only if the nominee refuses to resign, and the shareholders' agreement should be checked first for any contractual restriction on removal.

Example 4: Deadlock in a 50:50 company

Two shareholders hold 50% each and one wants the other removed. An ordinary resolution needs a simple majority of votes cast — which cannot be achieved on a 50:50 split where both vote. Section 169 offers no way out here. The realistic routes are a negotiated exit under the shareholders' agreement, or a petition to the NCLT under Sections 241–242.

Section 169 vs Section 167 vs Section 168: Which Route Applies?

Frequently Asked Questions

Can shareholders remove a director? Yes. Under Section 169 of the Companies Act, 2013, shareholders can remove a director before the expiry of their term by passing an ordinary resolution in a general meeting, after giving the director a reasonable opportunity of being heard.

How do I remove a director from a private limited company? Obtain a valid special notice from qualifying members, send a copy to the director, convene a board meeting, issue notice of a general meeting with 21 clear days' notice, circulate any written representation, pass the ordinary resolution at the meeting, and file DIR-12 within 30 days.

Can the Board of Directors remove a director? No. The board cannot remove a director under Section 169 — that power rests with the shareholders. The board can only convene the general meeting and, separately, record an automatic vacation of office under Section 167.

What is the difference between DIR-11 and DIR-12? DIR-11 is filed by a director who resigns. DIR-12 is filed by the company to record any appointment, change or cessation of directors, including removal. A removal is recorded through DIR-12.

How long does removal of a director take? Typically four to six weeks, driven by the 14 clear days for special notice, 21 clear days' notice of the general meeting, and the 30-day DIR-12 filing window.

Can a removed director be reappointed? Not by the Board. A director removed under Section 169 cannot be reappointed by the Board to fill the casual vacancy created by the removal. Reappointment by the shareholders at a later general meeting is a separate question.

Is a removed director entitled to compensation? Section 169 expressly preserves any right to compensation or damages payable under the terms of appointment or under any contract of service. Removal does not extinguish contractual entitlements.

Can an independent director be removed the same way? An independent director in their first term can be removed by ordinary resolution. An independent director reappointed for a second term under Section 149(10) requires a special resolution.

What if removing the director leaves only one director in a private company? That breaches the minimum of two directors under Section 149. Plan the appointment of a replacement at the same general meeting — noting that special notice of the intended appointment is required if you want to fill the vacancy in that meeting.

Can a director be removed without a meeting? No. Removal under Section 169 requires a resolution passed at a general meeting where the director has the right to be heard. It cannot be done by circulation.

What happens if the company does not follow the procedure? The resolution can be challenged and set aside, and the company and its officers face penal exposure for procedural defaults. It also increases the risk of an oppression and mismanagement petition under Sections 241–242.

Can a director be removed by the NCLT? Yes. In proceedings under Sections 241–242, the Tribunal can order the removal of a managing director, manager or director. A director appointed by the Tribunal under Section 242 cannot be removed by the shareholders under Section 169.

Conclusion

Removal of a director is straightforward on paper and unforgiving in practice. The substance of the decision belongs to the shareholders, but the validity of the decision belongs almost entirely to the procedure: a valid special notice from qualifying members, prompt service on the director, a genuine opportunity to be heard, circulation of any written representation, a properly conducted general meeting, and DIR-12 filed within 30 days.

The most important takeaway is this: before starting a Section 169 process, check whether you need one at all. If the office has already been vacated under Section 167, or if the director is willing to resign under Section 168, those routes are faster, cheaper and far less likely to end up before the NCLT.

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