Right to Remove a Director is Legal Right of Share Holders:

Section 169 and Chapter 7 of Companies Act, 2013 Right of Shareholders to remove a director in the General Meeting through Ordinary Resolution is a Legal Right. This legal right cannot be damaged or taken away by MOA, AOA or any other documents or Agreement.

Section 169 and Chapter 7 details the procedure of removal of director by shareholders as follows: –

A company MAY, by ordinary resolution, remove a director,

Not being a director appointed by the Tribunal under section 242, before the expiry of the period of his office after giving him a reasonable opportunity of being heard.

The provision relating to removal shall not apply where the company has availed itself of the option to appoint not less than two – thirds of the total number of directors according to the principle of proportional representation.

A special notice shall be required of any resolution, to remove a director, or to appoint somebody in place of a director so removed.

As per Section- 115 of Companies Act, 2013:-

Special notice to Company-There is a criteria, who can send the notice to the Company. Only shareholder/s holding not less than 1% of total voting power or holding shares on which an aggregate sum of not less than Rs. 5,00,000 has been paid up as on the date of notice, can send special notice to the Company for removal of director. The same should be signed by the concerned shareholder/s.

Date of meeting-Shareholders have the right to decide the date of meeting. However, the special notice shall not be sent earlier than three months from the date of meeting but at least 14 clear days before the date of the meeting, at which the resolution is to be moved.

On receipt of notice of a resolution to remove a director, the company shall immediately send a copy thereof to the director concerned, and the director, whether or not he is a member of the company, shall be entitled to be heard on the resolution at the meeting.

Intimation to Director– the Company shall forthwith send a copy of the notice to the concerned director.

Reasonable Opportunity of being heard– The director concerned may make representation in writing to the company and requests its notification to members of the company. The Director may request to send his representations along with the notice to the members and to be heard at the meeting. However, the rights may not be available, if on the application either of the Company or of any other person who claims to be aggrieved.

Section 169 of the Company Act, give power to shareholders to remove the managing director in a general meeting by an ordinary resolution.

A Special Notice as per the provisions of Section 115 of the Companies Act, 2013 of the intention to move a resolution for removal of the director be furnished by number of members to the company at least 14 days before the meeting at which it is to be moved, exclusive of the day on which the notice is served and the day of the meeting.(Section 169)

2) The Company shall, immediately after the notice of the intention to move any such resolution has been received by it, give its members notice of the resolution in the same manner as it gives notice of the meeting.

3.In case the company is not in a position to give notice to all the members, it can publish by way of an advertisement in the newspaper having an appropriate circulation not less than 7 days before the meeting.

4.The Company must give intimation to the concerned director of the intended resolution by sending a copy of the special notice received by it, forthwith on receipt thereof. The Director shall have the right to be heard on the resolution at the meeting.

5.The Director who is sought to be removed, can make a representation in writing against his removal and request the Company to notify it to the Company's members. Further, if the director requests the company to notify the members of the company his representation against his removal and the representation is of reasonable length and it has been received not too late, the company must :

(a)mention in the notice of the resolution to be moved at the Annual General meeting, the fact of the representation having been received; and

(b)send a copy of the representation to every member along with the notice of the meeting if the representation has been received before sending the notice of the meeting or separately if the representation has been received after sending the notice of the meeting.

6If the representation could not be sent to the members because it was received too late or because the company made a default in sending it, the company must read out the representation at the Annual General Meeting, if the director requires it to do so. In addition to the above, the director can make oral representation at the Annual General Meeting.

7.Thereafter hold and convene a General Meeting to discuss besides other matters, if any of the following matter relating to removal of director:

"To pass a ordinary resolution for removal of the Director"

8.If the company is a listed entity then it should file a copy of the proceedings of the General meeting before the Stock Exchange(s) where the securities of the company are listed.

1. A Director can be removed from his office by passing an ordinary resolution provided that the specification as laid down in Section 284 is followed.

2. Special notice has to be issued on the members for a resolution requiring the removal of a Director or to appoint another Director in his place at the same meeting in which he is to be removed.

3. A copy of the special notice as above should also be forwarded to the Director intended to be removed.

4. Without prejudice to the right of a Director to be heard at the meeting on receipt of such special notice the Director may make a representation in writing of reasonable length in his defense to the Company on receipt of the special notice which in case if its not too delayed, a reference in the special notice that a representation in the regard is received by the Director has to be made and a copy of the same is to be forwarded to the members and in case the representation has not been so forwarded then the Director may cause the representation to be read out at the meeting.

5. The vacancy of the Director if he has been appointed at a general meeting may be filled at the same meeting by appointing another Director in his place by the members and a reference of such an intended appointment has to be made in the special notice. It has to be noted here that a Director removed under the meeting cannot be reappointed by the Board of Directors.

6. The power under this Section shall be in addition to other powers under the Companies Act for the removal of a Director. And the removal of the Director shall not disentitle him of any compensation or damages payable to him for the wrongful termination of his office as the Director or for the termination of any other employment/office as a result of his termination as the Director.

Procedure to remove the managing director before the expiry of period by the shareholders under section 284 of the companies act, 1956:

A Special notice* of the intention to move a resolution for the removal of director be furnished by any member to the company not less than 14 days before the meeting at which it is to be moved, exclusive of the day on which the notice is served and the day of the meeting.

If is not possible for the company to give notice to all the members, publish by advertisement in the newspaper having an appropriate circulation not less than 7 days before the meeting.

The company must give intimation to the Managing director of the intended resolution by sending a copy of the special notice received by it, forthwith on receipt thereof. The Managing director shall have the right to be heard on the resolution at the meeting.

Mention in the notice of the resolution to be moved at the annual general meeting, the fact of the representation having been received; and

Send a copy of the representation to every member along with the notice of the meeting if the representation has been received before sending the notice of the meeting or separately if the representation has been received after sending the notice of the meeting.

In case of listed companies, notify the Stock Exchange with which shares of the Company are listed about the change in the company directors [Clause 30(a) of the Standard Listing Agreement].

File [e-form no. 32] with the Registrar of Companies with in 30 days of passing the resolution.

Make necessary entries in the Register of Directors and in the Register of Director’s Shareholding. [Section 303(1) & 307].