Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

directors

Bhanu (hyderabad) (1653 Points)

14 October 2018

If there are only two directors in a private limited company in India, can one director remove the other and appoint third person as a director?

Reply
Follow
Share

3 Replies

Vibha Trivedi (437 Points)
Replied 14 October 2018

Sir,

The Authority to remove Directors is with the members,not with the Directors.

The Authority to appoint a director is also with the members not the directors except as provided in section 161 of CA 2013.

Assuming that two directors are also the only members of the Company then by complying section 169 of the Companies Act 2013 in true letter and spirit, a director can be removed.

Further it is also lawful on the part of the only director to act for the appointment of another director to get the required qourum.(section 174)

Further it seems more practicable to first appoint the new director and then remove the old director.

Further if the director voluntarily wants to resign , first the new director should be appointed then the old director should resign.

Further it is the members of the company who can remove the director, not the shareholders. The Authority to appoint a Director is also with the members of the company except as provided in section 161 of ca 2013.

2 Like