Section 169 of the Companies Act, 2013 empowers shareholders to remove a director before the completion of their tenure through a proper process. This provision is rooted in the principle that directors, though appointed by the company, must function in alignment with the shareholders’ interests.

Legal Provision
“A company may, by ordinary resolution, remove a director before the expiry of the period of his office after giving him a reasonable opportunity of being heard.”
— Section 169(1), Companies Act, 2013
However, this section shall not apply to:
1. Directors appointed by the Tribunal under Section 242 (in cases of oppression and mismanagement)
2. Directors appointed under proportional representation mechanism as per Section 163

Eligibility: Who Can Be Removed?
This section applies to:
1. Executive Directors (whole-time directors)
2. Non-Executive Directors
3. Independent Directors (if not appointed by Tribunal or via proportional representation)

When Can a Director Be Removed?
A director can be removed:
1. At any time before the expiry of their term
2. Without specifying any reason, unless contractually protected
3. Provided the process is initiated correctly via a special notice and shareholder resolution

Procedure for Removal of Director – Step-by-Step

✅ 1. Special Notice by Members
1. A special notice under Section 115 must be given by:
(i) Members holding not less than 1% of total voting power, or
(ii) Members holding shares on which an aggregate sum of ₹5,00,000 or more has been paid-up

✅ 2. Intimation to the Company
(i) The notice must be submitted to the company at least 14 clear days before the meeting (excluding the day of the meeting and day of notice).

✅ 3. Intimation to Director
(i) Upon receipt, the company must inform the concerned director immediately.
(ii) The director has a legal right to be heard in the meeting.

✅ 4. Director’s Representation (Optional)
(i) The director can send a written representation explaining their position.
(ii) The company is required to circulate this to all shareholders.
(iii) If circulation is not feasible, the director has the right to read it aloud at the meeting.

✅ 5. Convening General Meeting
(i) A general meeting (AGM/EGM) is convened.
(ii) An ordinary resolution is passed (simple majority: more than 50%).

✅ 6. Post-Removal Filing
(i) The company must file Form DIR-12 with the ROC within 30 days of passing the resolution.
(ii) Update the company’s register of directors.

Common Reasons for Removal
Section 169 doesn’t require justification, but typical reasons include:
(i) Mismanagement or poor performance
(ii) Breach of fiduciary duties
(iii) Involvement in fraud or misconduct
(iv) Violation of company policies
(v) Breakdown of trust with shareholders
(vi) Conflict of interest
(vii) Legal disqualification (e.g., under Section 164)

ROC Compliance – Filings and Documentation