Resignation of Director
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Penalties
Smooth Exits: How Directors Resign From A Company In India
Running a company comes with its ups and downs, and sometimes, even directors need to step away. If you’ve ever wondered how a director can gracefully bow out without legal headaches, you’re in the right spot. Today, we’re diving into the resignation process under Section 168 of the Companies Act 2013. We’ll keep it straightforward no legalese overload.
Why Resignation Matters:
Picture this: A director decides it’s time for a career pivot, or personal reasons pull them elsewhere. Under the Companies Act 2013, resignation isn’t just a polite “I’m out” email—it’s a formal move to keep company records clean and transparent. This protects everyone: the company stays compliant, shareholders get the full story, and the director avoids loose ends. Section 168 ensures that changes like this are documented properly, thereby maintaining trust in the business world.
The Resignation Roadmap: Step by Step
Quitting as a director is voluntary and doesn’t need board thumbs-up—yay for independence! But follow these steps to keep it hassle-free:
Draft and Send the Resignation Notice
Write a clear and concise letter to the company’s board stating you’re resigning, the reasons for resignation, and your effective day.
Board Takes Note
The board should discuss it in their next meeting and pass a simple resolution noting the resignation.
Director’s Filing Duty (Form DIR-11)
The outgoing director should file the Form DIR-11 with the Registrar of Companies (ROC) within 30 days of the resignation.
Company’s Filing Responsibility (Form DIR-12)
If the director does not file the Form DIR-11, then the company should file the Form DIR-12 with the ROC within 30 days of the resignation.
Update the Register of Directors
The Company should update its directors’ register, inform key stakeholders (like employees or investors), and if required, onboard a replacement to comply with the minimum director requirements.
Penalties on Non-Compliance:
Where there is any non-compliance with the applicable provisions, the Company and the Officers in Default may be subject to a penalty of ₹50 Thousand for the first offence, and a further penalty of ₹500 per day for continuing offence, subject to a maximum of ₹3 Lakh (For the Company) and ₹1 Lakh (For Officers in Default).
Frequently Asked Questions
How do I start a business in India as a foreign company?
Foreign companies can set up a liaison office, branch office, or wholly-owned subsidiary in India. Corpsecure assists with RBI, FEMA, and ROC compliances for a smooth entry.
What is the cost of company registration in India?
The cost depends on the type of company (Pvt Ltd, LLP, OPC, etc.) and government fees. On average, registration can start from ₹7,999 onwards with professional assistance.
How long does it take to register a company in India?
With proper documents, company registration can take 7–15 working days. Corpsecure ensures faster turnaround by managing documentation and compliance.