Removal of Company Director — DIR-12, Resignation vs Removal Procedure
Introduction
A change in the board of directors is a common corporate compliance requirement. However, resignation and removal of a director are legally different processes. While resignation is initiated by the director, removal is a decision taken by the company and generally requires shareholder approval.
For FY 2026-27, the applicable provisions continue to be governed primarily by Sections 168 and 169 of the Companies Act, 2013, along with the prescribed filing requirements under Form DIR-12. MCA’s current DIR-12 instructions prescribe a 30-day filing timeline for companies other than IFSC companies.
Resignation of Director — Section 168
When a director voluntarily steps down, he or she should submit a written resignation to the company.
The resignation becomes effective from the date the company receives the notice or the later date specified by the director, whichever is later. The company is then required to intimate the Registrar through DIR-12 within 30 days.
The director may also forward a copy of the resignation along with the reasons to the Registrar within 30 days.
Basic procedure
Director submits resignation letter to the company.
Board takes note of the resignation.
Company records the cessation in its minutes.
Company files Form DIR-12 with MCA within 30 days.
Resignation is disclosed in the Directors’ Report of the immediately following general meeting.
The important point is that DIR-12 is a reporting form; it does not itself create the resignation. The resignation takes effect according to Section 168.
Removal of Director — Section 169
Removal is different because the director does not voluntarily leave.
Under Section 169, a company can generally remove a director before expiry of his term by passing an ordinary resolution, after giving the director a reasonable opportunity of being heard. Certain exceptions apply, including directors appointed by the Tribunal and cases involving proportional representation. An independent director reappointed for a second term requires a special resolution for removal.
Basic removal procedure
A special notice of the proposed removal is given.
The company sends the notice to the concerned director.
The director is given an opportunity to make written representations and to be heard at the meeting.
A general meeting is convened.
Shareholders vote on the proposed removal.
After the resolution is passed, the company files DIR-12 with MCA within 30 days.
If required, a new director may be appointed to fill the vacancy.
This is why a company should not simply file DIR-12 showing “removal” without completing the underlying corporate process.
Resignation vs Removal — Key Difference
Particular Resignation Removal
Initiated by Director Company/shareholders
Main provision Section 168 Section 169
Consent of director Voluntary Not required
Shareholder resolution Generally not required for resignation Generally required
Opportunity of hearing Not applicable as removal process Required
MCA filing DIR-12 DIR-12
Normal filing timeline 30 days 30 days
Main supporting document Resignation letter Resolution/cessation documents and applicable evidence
DIR-12 Filing and Fees
The current MCA DIR-12 instruction kit provides that the form is generally required to be filed within 30 days from the event date for companies other than IFSC companies.
The normal DIR-12 fee depends on the company’s nominal share capital:
Less than ₹1 lakh — ₹200
₹1 lakh to ₹4.99 lakh — ₹300
₹5 lakh to ₹24.99 lakh — ₹400
₹25 lakh to ₹99.99 lakh — ₹500
₹1 crore or more — ₹600
Company without share capital — ₹200
Delayed filing attracts additional fees. MCA’s DIR-12 instructions specify additional fee multiples ranging from 2× to 12× of the normal fee, depending on the period of delay.
Practical Compliance Point
The biggest mistake is treating resignation and removal as the same thing. If a director has voluntarily stepped down, the company should follow Section 168. If the company wants to remove a director against his or her wishes, the Section 169 procedure must be followed carefully, including special notice and the director’s right to be heard.
A properly documented Board/General Meeting process followed by timely DIR-12 filing keeps the company’s MCA records aligned with its actual board composition.
Conclusion
Removal or resignation of a director is not merely an MCA formality. The reason for cessation determines the legal procedure. Resignation under Section 168 is initiated by the director, whereas removal under Section 169 is a company-driven process requiring the prescribed shareholder procedure.
For companies, the safest approach is simple: document the event correctly, follow the applicable section, pass the required resolution, and file DIR-12 within the prescribed timeline. This avoids unnecessary MCA compliance issues and keeps the company’s statutory records accurate.
Vansh Bhatiya is an Accounts Executive in TAXAJ's Accounts & Taxation team. With over six years of industry experience, Vansh handles bookkeeping, tax filings and day-to-day compliance for clients. TAXAJ is a multi-disciplinary consulting firm spanning finance, taxation, legal, secretarial, FEMA and IPR, with offices in Delhi, Bihar, Bangalore and Goa.
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