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Summary Removal of Directors Notes
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Removal of Directors Notes
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Removal of DirectorsDismissal of a Director
• By shareholders under s168 CA 2006 by ordinary resolution.
• Shareholders are not required under the Companies Act to provide reason for
the dismissal.
Dismissal procedure
• Dismissal process is commenced by one or more shareholders through
written notice to the Company - ‘special notice’ – s 168(2) which should be
followed by the Board calling a meeting of shareholders (GM) to consider a
resolution to dismiss.
• Special notice means that the shareholder must give formal notice at
the company’s registered office of his intention to propose the
resolution at least 28 clear days before a general meeting.
• Special notice must be given at least 28 days before meeting to consider
dismissal
• But if no meeting date has been fixed when special notice given, it will be
deemed valid even if a meeting is then called for less than 28 days thereafter
(s312(4))
• In order to prevent directors, once they receive the notice from the
shareholder, calling the meeting before the 28 clear days’ notice and
invalidating the notice. – s312 (1)
, • The shareholder’s right to dismissal cannot be removed by anything in a
director’s service contract (s 168 (1)) or by an article, although articles may
contain additional methods of removal.
• Written resolutions cannot be used to remove a director – s288(2)(a)
• If the board of directors wishes to, it may call a general meeting by the usual
manner –s312(2)
What if the Board refuses to convene a GM?
• Why might they refuse?
- If it is their own dismissal which is being proposed, or they do not support
the dismissal of another director.
• Can the member(s) who are proposing the dismissal insist on a GM being
held?
- s303 – if they hold at least 10% of the shares they can formally ‘requisition’
the directors to call a GM
- the directors then have 21 days from receipt of the notice to call the
GM – s304 (1) (a)
- If they refuse, the members can convene the meeting themselves – s305
- The meeting must then be held no later than three months after the
date that the directors became subject to the requirement to call the
meeting – s 305 (3)
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