in this video i want to take a look at the question of the removal of a director in a company
this is something that arises from time to time obviously there can be disputes or falling outs or
any number of reasons why members or other directors might want to remove a director
the first thing to be said about the removal of a director is that in a single member company in
other words one member one shareholder one owner a sold member may remove a director by written
resolution without holding an egm and we'll have a look at the requirement to hold an egm
shortly under section 146 of the companies act 2014 but a sole member a single member company
can remove a director by written resolution without holding an egm some of the issues
arising then in relation to the removal of a director before we take a look at it
would be whether the employer or whether the director has a contract of employment or even if
he or she does not have a contract for employment if he's an executive director then he is or she is
an employee and therefore procedural fairness is required and you must deal with it or you
must take into account the requirement for natural juices fair procedures and so on in determination
of the employment essentially also the removal of a director one of the issues arising is that the
removal does not affect the director's right to compensation so the director may have a right to
compensation under the employment law for example and as i say an executive director is also an
employee of the company there's also the question that a director may also be a shareholder and if
the director is a shareholder then the question of the oppression of a minority shareholder may
give rise to legal proceedings or a claim for oppression of a minority shareholder the
company's constitution then may give rise or may provide for the removal of a director in writing
it's unlikely but it may have that provision in it if it does or indeed it may well have other
methods of removing directors in the company's constitution but your bog standard company's
constitution probably does not have these special powers and you probably left with the
provision of section 146 of the companies act 2014. before we move on to that and before we look
at what's involved in section 146 of the companies act you should bear in mind that as always
an amicable parting or resignation is probably the most cost effective way to deal with the removal
of a director in all of these disputes which arise and in which the law can be involved it
is generally the case that legal proceedings legal disputes can be time consuming and can be costly
so doing a deal making terms resignation american partying should not be ruled out in fact should
be probably the number one option to look at in the first instance if then you're stuck
with section 146 of the companies act 2014 unless the directors themselves propose the resolution
the members must give extended notice of at least 28 days notice to the company that an
ordinary resolution is to be proposed at an egm an extraordinary general meeting to remove a director
the company then sends notice to the said director the board meeting will hold an egm
extraordinary general meeting 21 days notice then must be given to members 21 days notice
to the members can be included in the 28 days that we've looked at in the first instance where
notice to the company that an ordinary resolution is to be proposed to remove a director so members
must get 21 days notice the director then may make representations to the company or to the members
the board may also make representations to the members on whether it agrees or disagrees with the
proposal to remove the directory question remember the proposal may well come from the members
and the directors may not agree with it or they may agree with it the director then is entitled
to speak at the egm the extraordinary general meeting the vacancy can be filled at the egm
there and then or it can be filled later on and then if the ordinary resolution to remove
the directory is passed form b10 needs to be filed at the company's registration office
website or portal and the statutory record of the records of the company itself must be updated
so that is the position in relation to the removal of a director it can be messy it can be amicable
the best way as i say is resignation and some sort of uh navigable parting of the ways but if
necessary and if the company's constitution does not make provision for it specifically
then you can always rely on the companies act 2014 section 146 and do bear in mind that the director
who is an executive director is also an employee and is entitled to procedural fairness and there
may well be employment law considerations to be factored in so you probably should get legal
advice you should definitely get a legal advice in fact the question then obviously of a director
being a shareholder is something that needs to be considered because there is the question of
some sort of a civil action for the oppression of that director's rights as a minority shareholder
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