Removal of Directors
Appointment and removal of directors
The first directors of a company must be named in a statement delivered to the Companies Registration Office. The appointment of the first directors is recorded on a form A1, which is subsequently legally declared under the Statutory Declarations Act 1938 by an officer of the company. The rules and procedures governing subsequent appointments are governed by the articles of association. A director is usually appointed by the company in a general meeting and the Registrar of Companies is notified by filing a form B10. The standard articles as contained in the Companies Act 1963 provide that one third of directors, apart from the managing director, retire each year at the AGM and may, if they wish, offer themselves for re-election.
Where a director dies or resigns, the articles generally empower the board of directors to fill such a vacancy until the next general meeting of the company when the appointed person is eligible for re-election. The articles may also be drafted in a manner permitting the appointment of certain persons as directors for life and is only permitted in private companies.
Removal of Directors
The members of the company are empowered to dismiss or remove a director by passing an ordinary resolution by a simple majority. Where a director is appointed for life by the memorandum or articles of association, such a director can only be removed if the correct procedure for the alteration of the memorandum or articles of association is followed.
Where a resolution to remove a director is proposed, 28 days notice must be given to the company and to the director concerned, unless the articles of association provide otherwise. Members must be notified of all written non defamatory representations in relation to the proposed resolution, and the director may require that the representations be read at the meeting and that he be afforded an opportunity to speak on the resolution at the meeting. A director who is removed cannot be deprived of compensation or damages to which he/she is entitled under a contract of employment.