Director Removal under the UK Companies Act 2006
Baher Saleh
International Associate
Introduction – Director Removal
Directors manage private companies, but shareholders may need to remove them. This article explains the Companies Act 2006 removal process and shareholders’ rights.
Removal by Ordinary Resolution
Under the Companies Act 2006, shareholders can remove a director by ordinary resolution at a general meeting with majority support.
The Requirement for a General Meeting
The Act states that shareholders must remove a director at a general meeting, not through a written resolution. This process ensures open discussion, allows all shareholders to participate, and gives the director a fair chance to present their case.
Special Notice Requirement
Shareholders must send a special notice to the company at least 28 days before the meeting to start removing a director. This gives everyone time to prepare and respond.
Shareholders’ Right to Request a General Meeting
Shareholders owning at least 5% of voting capital can request a general meeting to remove a director, highlighting minority shareholder power under Section 303(2)(Aa).
Section 304: Directors’ Duty to Call Meetings Required by Members
Directors must call a meeting within 21 days of being required and hold it within 28 days of issuing the notice. The notice must clearly outline any resolutions to keep shareholders fully informed.
Section 305: Power of Members to Call Meeting at Company’s Expense
Should the directors fail to call the required meeting, the shareholders who requested the meeting, may convene the meeting themselves. The company must reimburse members for reasonable expenses caused by directors’ inaction, protecting shareholders from financial burden.
Conclusion
Removing a director is a powerful shareholder right, governed by legal rules to ensure fairness and transparency under the Companies Act 2006.
Disclaimer: This Article is Not Legal Advice
This article explains how shareholders can remove a director refusing to resign under the UK Companies Act 2006. However, please remember that this is not legal advice.
Each company’s situation differs, so seek personalised advice from a qualified legal expert for your specific circumstances. This article is for information only and should not replace professional legal advice.
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