You have decided to step down as a director. You sent your resignation, but the company is dragging its feet and has not updated the government records. Your name still shows as a director, along with all the responsibility that comes with it. The good news is that you do not need the company's permission to resign, and you can protect yourself.
Your resignation does not need approval
Under Section 168 of the Companies Act, a director resigns simply by giving written notice to the company. The board cannot refuse it; it can only take note of it. Your resignation takes effect on the later of two dates: the date the company receives your letter, or the date you specify in the letter.
What the company is supposed to do
The company must inform the Registrar by filing Form DIR-12 within 30 days. Until that is filed, your name keeps appearing on the government records, which is why a stalling company is a problem.
What you can do yourself
- Keep proof of delivery. Send the resignation by registered post and email, and keep the receipts. This proves the date the company received it.
- File Form DIR-11 yourself. You can personally inform the Registrar of your resignation within 30 days. This locks your resignation date on record, even if the company does nothing.
- Send a reminder or legal notice. Point out that failing to file DIR-12 attracts a penalty on the company and its officers (50,000 plus 500 for each day the default continues, under Section 172).
- Complain to the Registrar. If the company still does not file, you can complain to the Registrar of Companies.
One caution: if you are the only director who signs the company's filings, filing DIR-11 may affect your digital signature's link to the company. Plan the timing with that in mind. Also note that you stay responsible for anything that happened while you were a director.
Stuck as a director of a company that will not let you go? Get a quote and we will file your DIR-11 and handle the follow-up.
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