BLP- Removal of Director

Table A article 81 deals with this and provides that the office of director will be vacated in a number of circumstances:

1. He ceases to be a director by virtue of … the act or prohibited by law from being a director.
2. He becomes bankrupt.
3. He resigns his office by notice to the company.
4. He shall for more than six consecutive months have been absent without permission of the directors from meetings of directors held during that period and the directors resolve that his office be vacated (taking article 11+12 into account).

It is therefore quite common for companies to supplement these provisions by giving the directors/members powers to remove in a wider range for circumstances.

Removal of director by members

Companies shall also be bound by s168 CA 06.; giving members power to remove a director by ordinary resolution at a meeting subject to a directors right to protest under s169 CA 06 (not that it’ll make a difference). Special notice to the company will be required (s312 CA 06) of at least 28 days. Therefore you can’t use short notice.

As a director is also a member, he may also have the benefit of what is known as a “Bushell v Faith” clause in the company’s articles (article 10). This gives the members enhanced voting rights on a motion to remove a director where he/she has less than 50% of the shares in the company.

Removal from Executive office

If the director is an executive then under Table A article 84 removal from the board would also terminate this role and the directors employment with immediate effect. However this can have employment law consequences as termination of an employment contract without notice may result in having to pay compensation. Unless the director has been guilty of very serious misconduct.