Appointment, Losing Office And Disqualification Of Directors 2 / 5

Appointment

No formal qualifications needed 

Limited number of ways in which directors can be appointed:

  1. Signing Section 9 documents when registering a new company

  2. Appointed at an Annual General Meeting (AGM) - by ordinary resolution

  3. Casual vacancy - appointed by the board

Removal

Directors can be removed in the following ways:

  1. Removal – by ordinary resolution, with special notice (28 days)

  2. Resignation – in writing

  3. Retirement – not standing for re-election

  4. Termination per the articles– failure to comply with articles eg. not participating in majority decisions

  5. Disqualification – by the Company Directors Disqualification Act 1986 (CDDA 86) - see below

Disqualification

Courts can disqualify anyone from being a director for between 2-15 years.

There are 3 categories of disqualification:

  1. General misconduct in running a company:

    Conviction for an indictable offence to do with running a company
    Persistent breaches of company legislation
    Fraud during winding up

  2. Disqualification for unfitness

    Declared by a court after a company insolvency
    After an investigation of the company

  3. Other cases

    Fraudulent or wrongful trading
    Undischarged bankrupts acting as directors
    Failure to pay under a county court administration order

Breaching a disqualification order is a criminal offence

Up to 2 years imprisonment and/or a fine.