Directors

This section on directors covers documents relevant to the appointment and removal of directors.

Who can be a director?

Every private company is required to have at least one director. Corporate directors are permitted but at least one director must be a natural person.

Are there any restrictions on who can be appointed as a director?

A person can be prohibited from acting as a director in a number of circumstances.  These include:

• if the individual is an undischarged bankrupt
• if the individual is subject to a Court order under the Company Directors Disqualification Act 1986 disqualifying them from acting as a director

In addition, a person who was a director of a company within 12 months prior to it going into insolvent liquidation cannot be, in the following five years, a director or otherwise involved in the management of a company with a name by which the insolvent company was known (or under which it carried on business) in the 12 months before its liquidation or a name which is so similar that it suggests an association with the insolvent company.

Is there a minimum or maximum age for a director?

There is no upper age limit for a director but a person newly appointed as a director must be at least 16 years old.

How are directors appointed?

The process for the appointment and removal of directors depends on a combination of the company’s Articles of Association, any Shareholders Agreement and the general law (principally the Companies Act 2006).

Specific provisions for how directors are appointed and removed may be found in the Articles of Association or Shareholders Agreement.  For example, these might provide that appointment and/or removal requires approval by the shareholders, by the other directors or that one or more shareholders has the right to appoint and/or remove one or more directors.  They might also specify a minimum or a maximum number of directors.

In the absence of any specific provisions, a director may be appointed by resolution of the board of directors or by ordinary resolution of shareholders.

How are directors removed?

Termination of appointment of a director can be more complicated.  As a general matter, a director may always cease to be a director by resigning.  The Articles of Association and/or Shareholders Agreement may include provisions for the removal of a director.  In addition, the Companies Act 2006 contains a mechanism for a director to be removed by ordinary resolution of shareholders, which must be passed at a shareholder meeting (and not by written resolution).  What is called special notice of a proposed resolution to remove a director must be given by the proposing shareholder(s) to the company.  This removal procedure cannot be disapplied in the Articles of Association.