A special notice shall be required of any resolution, to remove a director under section 169 , or to appoint somebody in place of a directorso removed, at the meeting at which he is removed.
04 August 2024
Under the Indian Companies Act, 2013, the removal of a director under Section 169 does indeed require a special notice. Here's a detailed explanation:
### Section 169 of the Companies Act, 2013
**Section 169** deals with the removal of directors by the members of a company. Here’s a brief overview:
- **Special Notice Requirement**: Section 169(2) of the Companies Act, 2013 specifies that the removal of a director from office requires a special notice. This notice must be given to the company not less than 14 days before the date of the meeting where the resolution for removal will be passed.
- **Special Notice Definition**: According to the Act, a "special notice" means a notice given to the company in writing by a member or members holding not less than 1% of the total voting power of the company.
### Specifics of Section 169
1. **Section 169(2)**: The provision states that: - A special notice must be given to remove a director. This notice should be given to the company at least 14 days before the meeting at which the resolution for removal is to be discussed. - The company must then notify the director concerned about the proposed removal.
2. **Provisions in the Practice Manual**: - **Practice Manual**: If your practice manual states that a special notice is not required, it could be an outdated practice or a misinterpretation. The Companies Act, 2013 is clear in requiring a special notice for the removal of a director.
### Steps to Follow for Removal of a Director:
1. **Special Notice**: - **File Special Notice**: Ensure that a special notice is given to the company at least 14 days before the meeting where the resolution for removal will be considered.
2. **Communication**: - **Notify the Director**: The company must notify the director being removed about the intention to remove them and provide an opportunity for them to be heard.
3. **Resolution**: - **Pass Resolution**: At the meeting, the members should pass a resolution to remove the director.
4. **Filing with Registrar**: - **Form DIR-12**: After the resolution is passed, file Form DIR-12 with the Registrar of Companies (RoC) to update the director’s status.
### Conclusion
**Yes, a special notice is required for the removal of a director under Section 169 of the Companies Act, 2013.** This requirement ensures transparency and gives the affected director a chance to respond to the proposed action. If your practice manual does not reflect this, it may need updating to align with the current statutory requirements.
CAclubindia
