Our Removing a Director Service
There are two principal ways in which a board can remove a director from a company.
1. Removing a director by ordinary resolution of members.
Section 168(1) of the Companies Act 2006 (Act) provides that:
“A company may by ordinary resolution at a meeting, remove a director before the expiration of his period of office, notwithstanding anything in any agreement between it and him.”
This essentially provides the majority (anything over 50%) of a company’s shareholders the ability to immediately remove a director.
For such removal to be valid, there are rules which must be adhered to:
- The resolution to remove a director must take place at a meeting. The written resolution procedure cannot be used.
- Twenty-eight days’ notice is required of a resolution to remove a director.
- A copy of the resolution must be sent to the director whose removal is sought.
- The director, whose removal is sought, has the right to protest against their removal, may address and circulate written representations in that meeting.
While section168 allows a company to remove a director, it will not deprive the removed director of compensation payable as a result of their removal.
The section168 power to remove a director cannot be taken away from the members. However, it is possible to make a removal more difficult by inserting a weighted voting rights clause in the company’s articles. Such a clause provides that, in the event of removing a director by resolution, the voting majority of the director being removed will be increased.
A note that the model articles for private limited companies do not provide for weighted voting rights.
Notably, section168 does not derogate from any other power that may exist to remove a director, and the company can, via its articles, provide for other methods to remove a director.
2. Removal of a director under the articles
The second method of removing a director from a company derives from a power of removal contained in the articles. The articles are the rules or contracts between a company and its members.
The model articles (the standard provisions that control how a company is run) do not contain any other removal methods.
However, many companies insert a provision in their company articles, stating that a director will be required to vacate the office provided all the other directors so require. Where a director is removed via such an article, there is no requirement to adhere to the procedural rules stated in section168 of the Act.
When confronted with a scenario involving the removal of a director from a private company, you should seek legal advice. There are key steps by which you must adhere to ensure that any removal of a director is lawful and minimises the risk of a potential claim and loss against the company
Our Approach To Removing a Director
Myerson are a leading commercial firm, which is renowned for its work in resolving director disputes.
Our commercial litigation team is ranked as “Top Tier” by the Legal 500 who describe us as ‘dynamic, positive, forward-thinking, effective and tenacious’, ‘very client-friendly’ and who give ‘sound and sensible legal advice’.
The Legal 500 highlights the department for its work in shareholder disputes.
The litigation team contains 15 solicitors and is headed by Adam Maher whom the Legal 500 rate as a “Leading individual” and ‘first-class litigator’ with ‘razor-sharp commercial judgement, tenacity and excellent communication skills’; who ‘quickly identifies the core issues’ and is ‘extremely robust under pressure.'
The litigation experts at Myerson are happy to discuss your situation in a no-obligation telephone call to assess your claim, give preliminary advice and suggest a way forward.
We can also suggest innovative funding solutions where available to assist with the costs of the litigation.
Why Work With Our Dispute Resolution Team
- For the past seven years, the Legal 500 has rated us as a Top Tier legal firm.
- You will get access to more than 9 dispute resolution professionals from the Myerson Dispute Resolution Group, who will assist you with , shareholder, and partnership disputes, professional negligence, commercial agency and more
- You will obtain city-quality dispute resolution legal help at regional pricing.
- We offer a partner-led service to make sure you get the greatest legal counsel and support with a focus on business.
- Our large and experienced team can work quickly to fulfil your deadlines.
- We recognise that each transaction is unique to your specific circumstances and that you require the assistance of a dispute resolution solicitor who has dealt with a wide range of clients and types of work.
- We are a full-service law company with a single location, which ensures our employees interact effectively and efficiently.
- We employ the most recent technology to make sure that we are operating as effectively as possible and that a client's location is not a barrier to us providing outstanding customer service.
- All of our clients receive free newsletters and webinars that keep them informed about dispute resolution legal developments. View our most recent webinar on dispute resolution updates here.
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Meet Our Specialists
Adam is a Partner and Head of our Dispute Resolution Team
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Lianne is a Senior Associate in our Dispute Resolution Team
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Jack is an Associate in our Dispute Resolution Team
Adam is a Solicitor in our Dispute Resolution Team
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