Section 168 of Companies Act, 2013 – Resignation of director

SECTION 168. RESIGNATION OF DIRECTOR

[Effective from 1st April, 2014]

(1) A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company:

Provided that a [2] [director may also forward] a copy of his resignation along with detailed reasons for the resignation to the Registrar within thirty days of resignation in such manner as may be prescribed.

Exemption

In case of a Specified IFSC private company for the word “ shall” the word “may” shall be read vide Notification no. G.S.R. 9(E).dated 04th January, 2017.

In case of a Specified IFSC public company for the word “ shall” the word “may” shall be read vide Notification no. G.S.R. 08(E).dated 04th January, 2017.

(2) The resignation of a director shall take effect from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, whichever is later:

Provided that the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.

(3) Where all the directors of a company resign from their offices, or vacate their offices under section 167, the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in general meeting.

Applicable Rules

Companies (Appointment and Qualification of Directors) Rules, 2014

[Effective from 1st April, 2014]

Rule 15. Notice of resignation of director.—The company shall within thirty days from the date of receipt of notice of resignation from a director, intimate the Registrar in Form DIR-12 and post the information on its website, if any.

Rule 16. Copy of resignation of director to be forwarded by him.—Where a director resigns from his office, he [3] [may] within a period of thirty days from the date of resignation, forward to the Registrar a copy of his resignation along with reasons for the resignation in Form DIR-11 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

[Provided that in case a company has already filed Form DIR-12 with the Registrar under rule 15, a foreign director of such company resigning from his office may authorise in writing a practising chartered accountant or cost accountant in practice or company secretary in practice or any other resident director of the company to sign Form DIR-11 and file the same on his behalf intimating the reasons for the resignation.][1]

Applicable Circulars

Clarification relating to filing of e-form DIR-11 & DIR-12 under the Companies Act, 2013- regarding.

Circular No. 03/2015 dated 3-3-2015

This Ministry has received several representations about the difficulties faced by stakeholders due to deactivation of Digital Signature Certificate (DSC) following en masse resignation of all the directors of a company before appointment of new directors in their places.

The difficulty arises because of automatic deactivation of DSC on filing of DIR-11 (Notice of resignation of a director to the Registrar) by the resigned/resigning Director (s), and none of the new Director’s details having been filed. As a result, form DIR-12 (Particulars of appointment of directors and the key managerial personnel and the changes among them) cannot be filed by a company due to lack of an authorized signatory Director.

2. In order to enable the filing of such e-forms and till an alternative mechanism is put in place in MCA21 system, it is clarified that the Registrar of Companies within their respective jurisdictions are authorized, on request from the stakeholders, and after due examination, to allow any one of the resigned director who was an authorized signatory Director for the purpose of filing DIR-12 only along with additional fees, as applicable and subject to compliance of other provisions of Companies Act, 2013.

[1] Inserted by the Companies (Appointment and Qualification of Directors) Amednment Rules, 2015 vide Notification No. G.S.R 42(E) dated 19th January, 2015.

[2] Substituted for the words “director shall also forward” by the Companies (Amendment) Act 2017 vide Notification No. S.O. 1833(E)  dated 7^th May, 2018.

[3] Substituted for the words “shall” by the Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2018 vide Notification No. F. No. 1/22/2013-CL.V-Part-III dated 7^th May, 2018.