I Have Been Removed as a Director Without Any Consent or Meeting – What Can I Do About It?

As a Director, you may have a Director’s service agreement – similar to an employment contract. In small to medium-sized entities, you may also own shares and the court might even consider your arrangement a ‘quasi-partnership’. The precise position overall will therefore be important. The content of any contracts and the company articles of association will be incredibly important. 

It is possible the company may have used the Model Articles of Association (Table A if the company was incorporated under the Companies Act 1985). The Model Articles contain a number of specific situations in which a person ceases to be a Director immediately upon a condition being met, for example, if a bankruptcy order is made against that Director.

If there is no service agreement and none of the content of the articles of association applies, then a company can remove a Director by following the procedure set out in section 168 of the Companies Act 2006. Section 168 provides that a company can remove a Director by passing an ordinary resolution at a meeting. Special notice is however required. On receipt of notice of an intended resolution to remove a Director, the company must send a copy of the notice to the Director concerned. The Director is entitled to be heard on the resolution at the meeting and it may be contested.

If the above hasn’t happened then your best approach will depend on whether you are a Director alone, or you are a Shareholder in addition to being a Director. Your removal as a Director may not be lawful and you may have grounds to contest your removal. There are usually other commercial factors that also need to be taken into account, such as a simultaneous exit as a Shareholder. Depending on what you are trying to achieve it might be appropriate to focus on allegations of unfair prejudice as a Shareholder, as applicable, to commercially position you to maximise your exit as both a Director and Shareholder. If you are a Director solely it might be that a review and claim on the basis of breach of contract, unfair or wrongful dismissal, is appropriate. These will usually be lower value claims in comparison to claiming as a Shareholder.