To whom the director of a Company gives his resignation?

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In a situation where the Board of director refuses to admit the resignation given by the director, what are other choices left to the director to resign the office?

A director can resign his office in the manner stated in the Articles of Association of the Company .  A director may resign at any time by giving notice to the company whether company accepts his resignation or not.

Resignation in writing once made will take effect immediately from the time when it is tendered, unless otherwise any provision regarding this is expressed in the Articles of Association .  (Dushyant D. Anjaria Vs. Wall Street Finance Ltd )

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A company has statutory duty as per section 303 (2) to file with the Registrar of Companies a return in Form No. 32 with respect to any change in positions of the Directors of the Company.  Director is not liable to file Form NO. 32, however, the Company secretary of the company is liable to file Form No. 32 upon such resignation of the Director.

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Patna High court in its judgment The Registrar of Company Vs. Bihar Investment Trust Ltd  stated that it is an absolute right of any person to tender resignation and he cannot be compelled to function in the office a day longer than he desires and also stated that vacation of office of a director by resignation cannot be a ground to be included in the Articles of a Public company.

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A managing or whole time Director cannot resign merely by giving notice  as his resignation is governed by the terms and conditions of his appointment.  Also formal acceptance of the resignation is necessary to make the resignation effective and to be relieved. The resignation made by the director is irrevocable as the director who resigned has no power to withdraw the same, however, he may do so with the consent from the general meeting.  Also note that resignation of a director can also be oral and becomes effective if it is tendered at a general meeting and accepted at the meeting.

Related Link:

The Companies Act, 2013

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Adv. Anitha Gutti

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