Removal of Directors

Removal of Directors

Removal of Directors

The directors regulate corporate affairs of a public limited company. They are responsible for formulating plans, policies, and strategies. Directors are retired by natural ways or sometimes they are removed for some reasons. For the following reasons directors of the company are to be removed:

Removal by the shareholders: According to the Companies Act directors will be removed by the agreement of all shareholders in the annual general meeting.

Removal by the Government: Govt can also remove director for the following reasons

  • If any director ignores rules and regulations or cheats or alleged for any crime.
  • If any director rules the business that is not similar to the given objectives of the company.
  • If any director makes a great loss for the company.
  • If any director drives the company to any wrongful act etc.

Compulsory Removal: According to Companies Act, compulsory removal will be, happen by following reasons:

  • If directors will not purchase the minimum share requirement as for the directorship
  • If anyone is proved insane
  • Announcement of the bankruptcy by the court
  • Punished by the court for any illegal/unethical activities
  • Presenting in AGM without permission of the Board of Directors
  • For doing any public-nuisance
  • Announced unfit for directorship by the court etc.

In the conclusion of the description, we say that court can announce any directors as unfit if it is proved. Then these directors will be removed from the companies.

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