How can a director be removed?

Specific provisions for how directors may be removed from office may be found in the Articles of Association. For example, these might provide that the removal requires approval by the shareholders, by the other directors or that one or more shareholders has the right to remove one or more specified directors. If the Articles of Association do include specific provisions for the removal of a director, it will usually be easier to comply with them rather than to use the Companies Act 2006 removal process described below.

What is special notice to remove a director?

The Companies Act 2006 contains a process for a director to be removed by ordinary resolution of shareholders, which must be passed at a shareholder meeting (and not by a 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 process cannot be disapplied in the Articles of Association. On receipt of the special notice, the directors must call a meeting of shareholders for no earlier than 28 days following the date of receipt of the special notice. The director who is the subject of the resolution is entitled to make written representations concerning the potential removal, which the company must circulate to shareholders before the shareholder meeting. The special notice can also include a resolution to appoint a director in place of the director who is proposed to be removed. An ordinary resolution (simple majority) is required to remove a director under this special notice procedure.

What are weighted voting rights?

Where a shareholder who holds less than 50% of the voting rights wishes to protect against being removed as a director under this special notice procedure, it is possible to achieve this by including weighted voting rights in the Articles of Association. These weighted voting rights provide that, on a resolution to remove either that shareholder or that shareholder’s representative as a director, the shareholder may exercise multiple votes per share. The effect of this is that the resolution will not be capable of being passed, assuming the shareholder concerned votes against it. This protection is often included in the Articles of Association of joint venture companies, companies where there are a number of individual shareholders and in circumstances where an investor wishes to project its rights to appoint a director.

What about employment rights?

The removal of an individual as a director does not affect the individual director’s employment rights or status with the company (though the removal as a director may amount to grounds for an employment claim against the company, including for wrongful dismissal).

Does the removed director have a potential unfair prejudice claim?

If the removed director is a shareholder (or a representative of a shareholder), the shareholder may have grounds to bring a Court petition under the Companies Act 2006 against other shareholders who have caused the removal to take place on the basis that the affairs of the company are being conducted in an unfairly prejudicial manner. This is particularly the case if the company is found by the Court to be a quasi-partnership and the shareholder had a legitimate expectation to remain involved in the management of the company. If this is found to be the case, the likely remedy which may be awarded by the Court is that the petitioning shareholder’s shares should be bought by the other shareholders at their fair value.

Special notice to remove director template

Name: Special Notice to Remove a Director Template - PaperRock Documents
SKU: DIR005.001
Price: 35.00 GBP
Availability: InStock

Special notice to remove a director template under the Companies Act 2006, with alternative forms of notice from single or multiple shareholders and with an option to appoint a replacement director.

where one or more shareholders wish to remove a director
where the Articles of Association do not include a simpler process for the removal
as special notice pursuant to the Companies Act 2006 to remove a director

What are the key features?

alternative forms of letter – notice from either single or multiple shareholders
alternative forms of letter
- removal of director only
- removal of director and appointment of replacement director

What else do I need to know?

Under section 168 of the Companies Act 2006, a director can be removed from the board of directors by ordinary resolution of shareholders. This resolution must be passed at a shareholder meeting (known as a general meeting), not by written resolution. “Special notice” of the proposed resolution to remove the director from office must be given by the proposing shareholder(s) to the company. This statutory removal procedure cannot be overridden by the Articles of Association.

On receipt of the Companies Act 2006 special notice, the directors must call a shareholder meeting to be held no earlier than 28 days following the date of receipt of the special notice. The director who is the subject of the resolution has the right to make written representations concerning the potential removal from office, which the company must circulate to shareholders before the meeting.

The special notice can also include a resolution to appoint a new director in place of the director being removed.

Description

When do I use this document?

where one or more shareholders wish to remove a director
where the Articles of Association do not include a simpler process for the removal
as special notice pursuant to the Companies Act 2006 to remove a director

What are the key features?

alternative forms of letter – notice from either single or multiple shareholders
alternative forms of letter
- removal of director only
- removal of director and appointment of replacement director

What else do I need to know?

The special notice can also include a resolution to appoint a new director in place of the director being removed.

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£35.00 exc VAT

Updated by a lawyer on 28/08/2024

Updated By a lawyer on 11/15/2022

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Special notice to remove director template

When do I use this document?

What are the key features?

What else do I need to know?

When do I use this document?

What are the key features?

What else do I need to know?

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

Create your document in 3 Easy Steps

PaperRock offers affordable, legal document templates, written by experienced and expert lawyers, trusted by businesses across the UK and beyond. No hidden charges or trial sign-ups are required to complete your document.

“I have worked in legal and business affairs for over 25 years and need access to a wide range of corporate and commercial legal precedents. Paperrock is a refreshing source of high-quality legal templates. Superb value for money.”

Amanda | Bannister Creative

“It’s hard to find legal documents on the internet you can really trust. Knowing an expert lawyer has drafted what I need, gives my business the edge and gives me peace of mind.”

Elle, Founder | Winslow skincare & aesthetics.

“As an SME Paperrock saves us the legal fees we’ve previously had to spend. In these challenging times that's a big help. Great products and support.”

Giles, MD | Boniti Ltd.

Related Articles

Special notice to remove director template

When do I use this document?

What are the key features?

What else do I need to know?

When do I use this document?

What are the key features?

What else do I need to know?

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

Create your document in 3 Easy Steps

PaperRock offers affordable, legal document templates, written by experienced and expert lawyers, trusted by businesses across the UK and beyond. No hidden charges or trial sign-ups are required to complete your document.

“I have worked in legal and business affairs for over 25 years and need access to a wide range of corporate and commercial legal precedents. Paperrock is a refreshing source of high-quality legal templates. Superb value for money.”

Amanda | Bannister Creative

“It’s hard to find legal documents on the internet you can really trust. Knowing an expert lawyer has drafted what I need, gives my business the edge and gives me peace of mind.”

Elle, Founder | Winslow skincare & aesthetics.

“As an SME Paperrock saves us the legal fees we’ve previously had to spend. In these challenging times that's a big help. Great products and support.”

Giles, MD | Boniti Ltd.

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