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Eligibility criteria to become a director in a company

To be eligible to be a director in a company in India, an individual must be at least 18 years old, have a valid DIN issued by the MCA, not be disqualified under the Companies Act, give consent by filing Form DIR-2, and be appointed with an appointment letter filed in Form DIR-12. Directors can also resign by filing a resignation letter with the company and the MCA.

Reasons for Termination of Directorship in a company
Directors can be removed from their position in a company for several reasons. These include 
•    Entering into contracts or arrangements that go against the provisions of Section 184 of the Companies Act, 
•    Not following the rules of the Companies Act of 2013, 
•    Incurring any of the disqualifications specified under the Companies Act, 
•    Being absent from board meetings for over 12 months, 
•    Being disqualified by a court or tribunal, 
•    Being convicted of an offense and receiving a prison sentence of at least six months, or
•    Voluntarily resigning
 These provisions give companies the ability to remove directors who are not fulfilling their duties or are acting against the company's best interests.

What are the methods to remove a director in a company?

There are 3 methods to remove a director from a company:

1. Directors' Submission of Resignation
2. Absence of Director from Board Meetings for a Full Year
3. Shareholders' Initiation of Director Removal

To remove a director from the company when they tender their resignation, the following steps must be taken:

1. Hold a board meeting, giving seven days of clear notice.

2. During the meeting, take note of the resignation.

3. Pass a resolution in a particular format to that effect.

4. The resigning director must file Form DIR-11 in their individual capacity.

5. Submit Form DIR-12, along with the registration letter and the board resolution, to the registrar of companies (RoC).

6. Once all formalities are complete and forms are filed, the director's name will be removed from the company's master data on the Ministry of Corporate Affairs (MCA) website.

Absence of Director over a period in all scheduled board meetings

If a director fails to attend any board meetings for an entire year without obtaining leave of absence, they are automatically deemed to have vacated their position as per Section 167. This violation requires the completion of formalities including filing a Form (DIR-12), and ultimately results in the removal of the director's name from the Ministry of Corporate Affairs (MCA) database.

To remove a director by shareholders,

Follow these steps:

STEP 1: Send a notice to all shareholders for a board meeting within seven days.

STEP 2: Pass a resolution for a general meeting and director removal, pending shareholder approval on the meeting day.

STEP 3: After giving 21-day notice, hold the second meeting for voting on the resolution and allow the director being removed to speak on their behalf.

STEP 4: Submit Form DIR-12 with board and ordinary resolution attachments.

STEP 5: Upon completion of all formalities, the director's name will be removed from the MCA database and website.

 Not Filing Form DIR-12: What will be the Consequences?

According to regulations, the DIR-12 form is required to be submitted within 30 days of the date of resignation. Failure to do so may result in penalties as follows:

- If the filing is submitted between 30-60 days after resignation, the company will be required to pay twice the government fees;

- If the filing is submitted between 60-90 days after resignation, the company will be required to pay four times the government fees;

- If the filing exceeds 90 days, the company will be required to pay 10 times the government fees;

- If the filing exceeds 180 days, the company will be required to pay 12 times the government fees and may also be charged with a compounding offence.