How does a director resign?
A director resigns by giving a notice in writing to the company. The resignation takes effect on the date the company receives the notice, or on the date stated in the notice, whichever is later. The company files Form DIR-12 within 30 days of receiving the notice.
When does the resignation take effect?
Section 168 does not wait for the board to accept the notice. The board takes note of it. If the notice is received on 15 October and names no later date, 15 October is the effective date. If the notice is received on 15 October and names 30 October, 30 October is the effective date.
The director remains liable for offences that occurred during the tenure. A removal by the members is a different process, on the removal page. The company must still have the minimum number of directors. A private company needs two, a public company three, and a one person company one. A resignation that would drop the company below that number has to be paired with an appointment.
If every director resigns, or vacates office under section 167, the promoter or, in the promoter’s absence, the Central Government appoints the required number of directors. Those directors hold office until the company appoints directors in general meeting.
What does the company file?
The company intimates the Registrar in Form DIR-12 within 30 days from receipt of the notice, and places the fact of the resignation in the directors’ report laid at the next general meeting. DIR-12 is the same form used for an appointment. The filing is set out on the DIR-12 page. Noting the resignation is not filed in Form MGT-14.
A listed company also discloses the resignation under its listing obligations. This page does not set a stock-exchange day count. Where the chapter is defaulted and no other penalty is provided, section 172 applies: ₹50,000 on the company and on every officer in default, plus ₹500 a day while the failure continues, capped at ₹3 lakh for the company and ₹1 lakh for an officer. A late DIR-12 also draws the additional government fee. That fee is not restated here as a multiple of the filing fee.
What may the director file?
The director may forward a copy of the resignation, with the reasons, to the Registrar in Form DIR-11 within 30 days of the resignation. DIR-11 does not complete the company’s duty. A foreign director may authorise in writing a practising chartered accountant, company secretary, or cost accountant to sign DIR-11. The company’s form remains DIR-12.
Frequently asked questions
Four questions cover acceptance, DIR-11, MGT-14, and a resignation of every director.
Does the board have to accept the resignation?
No. The board notes the notice. The resignation takes effect on the statutory date even if the board has not passed a resolution accepting it.
Is DIR-11 the company’s form?
No. The company files DIR-12. The director may file DIR-11. Filing DIR-11 does not replace DIR-12.
Is MGT-14 filed for a resignation?
No. Noting a resignation is not a resolution that section 117 requires in MGT-14.
Does one resignation leave the company without directors?
A single resignation does not. If every director resigns, the promoter or, if there is none, the Central Government appoints the number of directors the company needs until the company appoints directors in general meeting.
Sources
Resignation is section 168 of the Companies Act, 2013. DIR-12 and DIR-11 are rules 15 and 16 of the Companies (Appointment and Qualification of Directors) Rules, 2014. The residual penalty is section 172.