Article - Companies

Removal of a Director

We are a relatively small company with four Directors.  One of our Directors is not performing and the remaining three wish to remove him as a Director.  Is this possible?

A company is able to remove a Director by passing an Ordinary Resolution (which requires special notice i.e. 28 days).  This is the case even if there is a clause in the company’s Articles of Association which requires a Special or Extraordinary Resolution to remove a Director.

However, you will not be able to remove the particular Director by Ordinary Resolution if your company’s Articles state that, in the event of a Resolution to remove a Director, any shares held by that Director are “weighted” i.e. carry two or more votes per share.  Accordingly, if you and your fellow Directors have 25% of the shares each and the Articles provide that each Director’s share of the votes on such a Resolution increases from one quarter to 75%, that Director cannot be removed by an Ordinary Resolution supported by the other Directors.

Assuming that “weighted” votes are not attached to the shares in your company, the company must ensure it sends a copy of the Notice of the Intended Resolution to remove the Director to that Director who is entitled to be heard on the Resolution at the meeting.  The Director can respond by making written representations.

In addition, you will be able to remove one of your Directors if either:-

  1. He becomes bankrupt or enters into any arrangement with his creditors generally; or

  2. He is or could be suffering from mental disorder and either he is admitted to hospital in pursuance of an application for admission for treatment under the Mental Health Act 1983 or an order has been made by a Court having jurisdiction to deal with mental disorder matters for his detention; or

  3. He does not attend Directors’ Meetings for more than consecutive months without permission of the Board.

Article First Published: 29 October 2003

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