Limited companies must always have at least one director. Company directors can be appointed or removed at any time from the inception of the company onwards, but there is a process that has to be followed.
Appointing a company director
The company director is appointed by the members who will be shareholders or guarantors. They may appoint one or more of themselves as directors or they may select someone else.
The person appointed has to sign a letter confirming their wish to be the director and this has to be approved by a majority of the members through passing an ordinary resolution. Within fourteen days, the details of the director will need to be sent to Companies House. Take a look here for more information on what you will need to provide.
Removing a company director
Removing a director can be complicated and will have a profound impact on the company. This can be particularly true if the director has given a directors personal guarantee which makes them personally liable for the company’s debts. It is for this reason that it is recommended that a directors personal guarantee is only taken with legal advice from a firm that has experience in this such as Parachute Law.
Nevertheless, there are a number of ways it can be done, and however it is achieved, Companies House must be informed and it must be in accordance with the Companies Act 2006.
The director could be asked to resign. This voluntary resignation will avoid a dismissal process. They can also be dismissed under the Articles of Association if UK legislation prohibits the director from being in office, a doctor certifies that they are not physically capable of remaining in office, or the director is made bankrupt.
Under section 168 of the Companies Act, shareholders can remove a director by passing an ordinary motion with a majority vote. A director can also be deemed unfit by the Court and removed for reasons such as not delivering tax returns, failing to keep proper accounting records, or continuing to trade in the case of insolvency.