How to Remove a Director from a Company
If a director is damaging the business, obstructing decisions or no longer acting in the company’s interests, removing them may become necessary.
However, removing a director from a a limited company incorporated in England or Wales is not simply an internal management decision. Shareholders must follow the correct legal procedure and consider the company’s articles of association, any shareholders’ agreement and the director’s contractual rights.
It is also important to understand that removing someone as a director does not automatically remove them as a shareholder.
Taking advice before starting the process can help prevent an attempted removal from developing into a wider director or shareholder dispute.
When you may need to remove a director
You may be considering removing a director if:
the relationship between the directors has broken down
a director is preventing important business decisions
you suspect a director has breached their legal duties
a director is acting against the interests of the company
there are concerns about misconduct or misuse of company assets
the business is experiencing management deadlock
a director is no longer contributing to the company
shareholders have lost confidence in the director
Even where shareholders have valid concerns, the removal process must be handled carefully.
A common director removal scenario
Consider a limited company owned by two shareholders.
One shareholder owns 60% of the voting shares and the other owns 40%. Both shareholders are also directors.
The relationship breaks down. The 40% shareholder-director stops cooperating, refuses to approve important decisions and begins communicating with customers without the agreement of the board.
The majority shareholder wants to remove them as a director.
Provided the shares carry ordinary voting rights and there are no special voting arrangements in the articles or shareholders’ agreement, the 60% shareholder may be able to pass an ordinary resolution to remove the other person as a director. However, the correct statutory notice and meeting requirements must still be followed.
Crucially, removing the individual as a director would not automatically remove their 40% shareholding.
They may also have rights under:
the articles of association
a shareholders’ agreement
a director’s service agreement
an employment contract
These documents should be reviewed before any formal steps are taken.
Under section 168 of the Companies Act 2006, shareholders can generally remove a director by passing an ordinary resolution at a general meeting.
The process will usually involve:
reviewing the company’s articles of association and any shareholders’ agreement
checking the director’s service agreement, employment contract and any other relevant contractual terms
confirming the voting rights attached to the shares, including any weighted or special voting arrangements
giving special notice of the proposed resolution to the company
ensuring the company promptly sends a copy of the notice to the director
establishing how the general meeting should be called under the articles and in the particular circumstances
giving the director an opportunity to attend the meeting, speak to the resolution and, where appropriate, provide written representations to shareholders
holding the meeting and shareholder vote
recording the decision correctly in the company’s records
updating the company’s statutory registers
filing the change at Companies House within 14 days
Special notice of the proposed resolution must generally be given to the company at least 28 days before the meeting at which it will be considered. The company must then promptly send a copy of the notice to the director concerned.
A resolution to remove a director under section 168 cannot normally be passed using the written resolution procedure. It must be considered at a meeting. The route for calling that meeting will depend on the articles and the circumstances. In some cases, shareholders may need to require the directors to call it.
How to remove a director from a limited company in England or Wales
Why the company documents matter
Although the Companies Act provides a statutory removal process, the company’s own documents remain important. They may set out circumstances in which a director automatically leaves office, as well as arrangements that affect voting rights, contractual obligations or the director’s shareholding.
Depending on their wording, the articles of association may provide for a director’s appointment to end automatically in circumstances such as:
resignation
bankruptcy
incapacity
disqualification
a specified period of absence from board meetings
A shareholders’ agreement may also contain provisions covering:
director appointments and removals
voting rights
management deadlock
compulsory share transfers
good leaver and bad leaver provisions
share valuations
shareholder exits
Although shareholders may have a statutory right to remove a director, exercising that right in breach of an agreement could lead to a separate contractual claim.
Where a director does not leave office automatically, the practical removal process will usually require a shareholder vote, an accurate record of the resolution and meeting, updates to the company’s statutory registers and a filing at Companies House within 14 days.
Removal from office may still trigger notice, compensation, bonus, restrictive covenant or other contractual issues. The statutory power to remove a director does not necessarily end those claims.
Why timing and procedure matter
Director disputes can escalate quickly.
Delays or procedural mistakes can:
disrupt the operation of the business
prevent important decisions from being made
allow confidential information to be misused
damage relationships with customers, employees and suppliers
lead to employment or contractual claims
contribute to an unfair-prejudice claim, particularly where the removal forms part of conduct that unfairly harms a minority shareholder
weaken your negotiating position
Removing a director should therefore form part of a wider strategy for protecting the company and resolving the underlying dispute.
Early action is not about creating unnecessary confrontation. It is about maintaining control, protecting business value and avoiding preventable legal complications.
How Adam Benedict can help
At Adam Benedict, we approach director removal as part of the wider commercial and shareholder relationship.
We will:
assess whether the director can be removed
review the articles of association and shareholders’ agreement
advise on voting rights and shareholder support
prepare the required notices and resolutions
help ensure the meeting procedure is followed correctly
advise on employment and contractual consequences
consider whether there is an agreed or compulsory mechanism for a share transfer, or whether a negotiated buyout is the more realistic route
help negotiate an agreed departure or shareholder buyout
advise on urgent protective steps where necessary
represent you in any resulting director or shareholder dispute
Our corporate and litigation teams understand that director disputes can affect every part of a business, from its decision-making and finances to its employees, customers and reputation.
If you are considering removing a director, early advice can help protect business continuity and ensure the procedure is handled correctly. It can also create space to explore an agreed departure or shareholder solution where that is appropriate.
Our corporate and litigation teams can advise in tandem on the removal process, the underlying dispute and any connected shareholder, employment or contractual issues. Speak to a member of our team to understand your voting position and the practical options available.
Discuss Your Director Removal Options
Frequently asked questions
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Yes. A shareholder, or a group of shareholders acting together, can remove a director if they control enough voting rights to pass an ordinary resolution.
An individual shareholder with more than 50% of the relevant voting rights may have sufficient votes to pass the resolution alone. A minority shareholder will usually need support from other shareholders.
The precise position will depend on:the number and class of shares held
the voting rights attached to those shares
the company’s articles of association
any shareholders’ agreement
whether weighted voting rights apply
Even where the required majority is available, the correct notice, meeting and voting procedure must still be followed.
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Yes. A director does not need to agree to their removal under the statutory process.
However, the company must promptly send the director a copy of the special notice, giving the director an opportunity to attend the meeting, speak to the resolution and, where appropriate, provide written representations to shareholders. They may also have separate contractual, employment or shareholder rights that must be considered.
Removing someone without their consent can therefore create additional legal risks if the process is not managed carefully. -
Not usually under the statutory shareholder process, as special notice and a properly convened general meeting are generally required.
However, the company’s articles may provide for a director’s appointment to end automatically in certain circumstances.
Urgent action may also be needed to restrict access to company systems, protect confidential information or prevent further harm while the formal removal process is completed. -
Not necessarily.
The board may be able to remove a director where the articles of association expressly provide for this or where a particular event automatically ends the director’s appointment.
Where no such provision applies, the director may need to be removed by the shareholders through the statutory process.
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No. A person’s role as a director is legally separate from their position as a shareholder.
After being removed as a director, the individual may continue to:
own their shares
vote on shareholder decisions
receive dividends
exercise other rights attached to their shares
challenge how the company is being managed
A separate share transfer, buyout, company purchase of shares or compulsory transfer process may be required.
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A director cannot normally remove someone as a shareholder simply by making a board decision.
Ending a person’s ownership of shares will usually require:
a voluntary sale or transfer
a negotiated shareholder buyout
a company purchase of its own shares
the operation of a valid compulsory transfer provision
rights contained in the articles or shareholders’ agreement
a court order or other legal remedy
Attempts to remove or dilute a shareholder improperly may lead to claims involving breach of duty, breach of contract or unfair prejudice.
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Removing someone as a director does not necessarily terminate their employment.
The company must separately consider:
the employment contract
the director’s service agreement
notice and termination provisions
employment law obligations
potential compensation or damages
any restrictive covenants
A person could be removed as a director but remain employed unless the employment relationship is also terminated correctly.
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Potentially. A director may challenge:
whether the correct statutory procedure was followed
the validity of the shareholder vote
compliance with the articles or shareholders’ agreement
the termination of their employment or service agreement
the treatment of their shareholding
the conduct of the remaining directors or shareholders
Removal can contribute to an unfair-prejudice claim, particularly where it forms part of conduct that unfairly harms a minority shareholder. Whether such a claim is available will depend on the circumstances as a whole.
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A 50/50 ownership structure can create deadlock because neither shareholder may control enough votes to remove the other director alone.
The available options may depend on:
the articles of association
the shareholders’ agreement
any deadlock provisions
whether the parties can negotiate a buyout
whether one party has breached their duties
whether court proceedings are required
Taking advice early can help prevent the dispute from paralysing the business.
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The company should:
update its register of directors
record the resolution and meeting minutes
file the change at Companies House within 14 days
review banking and signing authorities
remove or update access to company systems
protect confidential and commercially sensitive information
notify relevant employees, customers or suppliers where appropriate
Companies must generally notify Companies House within 14 days of a person ceasing to be a director, commonly using form TM01 or the online filing service.
