Company Law: Board of Directors' Resignation Dilemma
company ailet intermediate trick_questionYe sab theory hai, but let's see how many of you fall for this question. A company has a board of directors comprising 4 members, with two positions vacant. One of the directors, Mr. Sharma, tenders his resignation. The articles of association of the company state that a director can resign by giving a 30-day written notice. However, the notice has to be sent to the company secretary, who is the same person who is also holding another position in the company, that of a director. The question is - is Mr. Sharma's resignation effective? Most of you will say yes, but I have seen so many get it wrong. The answer is NOT straightforward. Think about it.
1 comments
1 Comments
Sign in to join the discussion.
I disagree with your view, bhai. If a director resigns, it's not necessary to get a board resolution, especially if the reason is personal or on health grounds. It's only in specific cases like misconduct or conflict of interest that the board needs to approve the resignation. Otherwise, the director's resignation is effective immediately.