Appoint or Remove Directors Template

What is a Directors’ Resolution to Appoint or Remove Directors?

A Directors’ Resolution to Appoint or Remove Directors is used for adding directors to the board or documenting a director’s resignation.

A Directors’ Resolution to Appoint or Remove Directors is a resolution passed by the directors of a company to appoint a new director, typically to fill a casual vacancy on the board.

Generally, a new director must be appointed by the shareholders of a company. A new director may be appointed by the board of directors using a Directors’ Resolution to Appoint Director(s) and/or Acknowledge Resignation of Director(s), subject to re-appointment by shareholders at the next general meeting.

Who can be a company director?

Almost anyone can be a director. There are very few limitations for the appointment, which makes company formation an available option for many people. An individual can be appointed if they are:

• At least 16 years old
• Not be disqualified to be a director
• Not be an undischarged bankrupt

Who cannot be a company director?

A person who is not an undischarged bankrupt cannot be a company director unless allowed by the court. After the court discharges the person from bankruptcy that individual may be appointed as a company director.

Who appoints directors?

Generally, the directors are appointed by the shareholders of a company at the Annual General Meeting (AGM) or rarely at an Extraordinary General Meeting (EGM). The decision for the appointment is made through the vote and passed if a majority of shares are voted in favor.

According to the articles of association, the number of directors may be limited, so a new director may be appointed only if a vacancy arises. And within 14 days after a new director is appointed the company must announce the Companies House.

Who can remove directors?

As the shareholders have the authority to appoint a director they can remove a director the same way. A director can be removed by 50% at a meeting of the shareholders and they need no reason. This right cannot be taken from them by anything contained in the director’s service contract or the Articles of Association. But if a removal violates the director’s service contract, or in the terms of a shareholder’s agreement, the director will have the right to fight for it if he chooses to go to court.

Even though a reason for removal need not be given. The common reasons for removal are:

• Mental disorder under the Mental Health Act 1983
• Bankruptcy
• Elimination under the law
• Violation of his service contract
• Self-resignation from office or
• Absence from a board meeting for six months in a row

Conclusion

A Directors’ Resolution to Appoint or Remove Directors is a resolution passed by the company directors to appoint a new director. Generally, this resolution is passed to fill a vacancy on the board. While appointing and removing directors from a company, there is a legal procedure that must be followed to assure that the appointment or removal is legal.

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