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Re: removal of director

Assoc_India (Managing Directo) (25 Points)

20 November 2011

Hello all,

I recently incorporated a pvt. ltd company along with a friend of mine (say A) with a total of 1,000 shares authorized and alloted. The allotment is 780 shares to me and the 220 shares to my friend (A).

Now the friend (A) wants to resign and is not in talking terms with me anymore.

I however want to continue with the company. To this end, I have another friend (say B) who has agreed to become a third director (so I can accept A's resignation without dissolving the company).

I have 2 questions here:

a. Do I need A's consent to appoint B as a third director in the company?

b. If B has come on Board as a Director with 100 shares from my side (so now I hold 680, A holds 220 and B holds 100), do I need A's consent to remove him from the board?

Please do share your helpful insights.

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4 Replies

prakash agrawal (proprietor) (26 Points)
Replied 20 November 2011

I think Firstly you may call bod meeting you. And. A and in the bod meeting take acceptance letter from b then file form 32 to ROC with this letter. Then in call another BOD meeting with A and B and take resignation then file form 32 to ROC alongwith resignation

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Assoc_India (Managing Directo) (25 Points)
Replied 20 November 2011

Thanks Prakash. What you have suggested is the ideal situation.

But my question what if A is non-coperative at the moment?

Charu Srivastava (Company Secretary) (4210 Points)
Replied 20 November 2011

The Minimum requirement of Director in Private limited Company is 2. Since other Director wants to resign. In such situation induct B as a Director of a Company by filing Form 32 with the ROC. Therafter Form 32 for cessation of B.

The answer of your queries are as follows:-

1). Yes you have to require the Consent of B because New director can be appointed in the Board where Minimum two Directors need to be present.

2). Yes.

Directors need not necessarily be a Shareholders unless your articles provide for Qualification Shares.Even B does not hold any shares he is still eligible for Directorship in your Company.

As your Company is a Private Limited Company, so you have to abide by the Articles of Association of the Company.

Hope i made my point clear.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 21 November 2011

Originally posted by : Assoc_India
	Hello all, I recently incorporated a pvt. ltd company along with a friend of mine (say A) with a total of 1,000 shares authorized and alloted. The allotment is 780 shares to me and the 220 shares to my friend (A). Now the friend (A) wants to resign and is not in talking terms with me anymore. I however want to continue with the company. To this end, I have another friend (say B) who has agreed to become a third director (so I can accept A's resignation without dissolving the company). I have 2 questions here: a. Do I need A's consent to appoint B as a third director in the company? b. If B has come on Board as a Director with 100 shares from my side (so now I hold 680, A holds 220 and B holds 100), do I need A's consent to remove him from the board? Please do share your helpful insights.

First of all you no need to have any consent of A to appoint B as a director of the Company.

Now, you just need following two document to change the constitution of the Board:

1. Resignation letter of A

2. Consent to act as director of B

Best way, hold a Board Meeting and appoint B as an Additional Director and then take resignation of Mr. .A.

File form 32 in the above order.

Alternatively, you can director take resignation of A and file form 32 and thenafter call EGM (by only one director) and appoint B as a Director.

The share transfer is not an issue you can any time execute a transfer deed and transfer the shares to B, for this also you not need any consent.

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