Section 169 of the Companies Act, 2013
Section 169 of the Companies Act, 2013 deals with the removal of directors by the shareholders before the expiry of their term.
🔹 Section 169 – Removal of Directors
🟡 Key Provisions:
Right to Remove a Director:
A company may remove a director (not being a director appointed by the Tribunal under Section 242) before the expiry of his term, by passing an ordinary resolution in a general meeting.
This is subject to the director being given a reasonable opportunity of being heard.
📝 Procedure for Removal:
Special Notice:
A special notice of the intention to move a resolution for removing a director must be given by members holding at least 1% of voting power or shares on which an aggregate sum of ₹5,00,000 has been paid-up.
Notice to Director:
On receiving the special notice, the company must send a copy to the concerned director.
Director's Right to Represent:
The director is entitled to make a written representation (not exceeding a reasonable length).
The company must send the representation to all members or read it out at the meeting, unless the Tribunal orders otherwise.
General Meeting & Resolution:
An ordinary resolution must be passed at the meeting to effect the removal.
Filing with ROC:
The company must file Form DIR-12 and inform the Registrar of Companies (ROC) about the removal.
🚫 Exceptions (Director Cannot Be Removed Under Section 169):
Directors appointed under Section 242 (i.e., by the Tribunal in case of oppression or mismanagement).
Removal of Independent Directors before expiry of their term also needs justification and special resolution per Schedule IV.
✅ Objective:
To empower shareholders with the right to remove a director who is not performing or acting in the company’s interest.
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