Can a Director Be Removed From a Company in the UK?

Removing a company director is a serious step that can have significant legal and commercial consequences. Whether due to misconduct, poor performance, or a breakdown in the working relationship, understanding the correct legal process is essential to avoid further disputes.

This guide explains how to remove a director in the UK, the process under the Companies Act 2006, and the risks businesses should be aware of.

Can You Remove a Director?

Yes, it is possible to remove a director, but the process depends on several factors, including:

• The company’s constitution (including the company’s articles)
• Any shareholder agreement in place
• The terms of any service agreement or director service agreements
• The provisions of the Companies Act 2006

In most cases, shareholders have the ultimate power to terminate a director’s appointment, even if the director does not agree.

The Legal Process Under the Companies Act 2006

The primary mechanism for removing a director is set out in section 168 of the Companies Act 2006.

1. Special Notice

To begin the process, shareholders must give special notice of their intention to remove the director. This means:

• Providing notice to the company of the proposed resolution
• Giving at least 28 days’ notice before the relevant meeting (although the company must then act within specific timeframes).

2. Informing the Director

Once the company receives the special notice, it must inform the director concerned. The director has the right to:

• Make written representations
• Request that those representations are circulated to shareholders
• Speak at the meeting where the removal is considered

This is an important safeguard and must be handled correctly to avoid procedural challenges.

3. Calling General Meetings

The company must then arrange general meetings to consider the proposed resolution to remove the director.

Shareholders will vote on the resolution, and in most cases, a simple majority is sufficient to remove the director.

4. Timing Requirements

While special notice requires 28 days overall, the company must provide shareholders with at least 14 days’ notice of the general meeting (unless shorter notice is agreed).

Failure to comply with these notice requirements can invalidate the process and lead to further disputes.

What About the Board of Directors?

The board of directors itself may also have powers under the company’s articles to remove a director in certain circumstances. However, this is less common and depends entirely on the wording of the company’s articles.

In practice, most removals are carried out by shareholders rather than the board.

The Role of Service Agreements

Removing a director from office is not the same as terminating their employment.

Many directors are also employees of the company and will have service contracts or director service agreements in place. These agreements set out:

• Notice periods
• Grounds for termination
• Compensation provisions

Even if a director is removed from their position under the Companies Act 2006, the company must still comply with any contractual obligations under the service agreement.

Common Disputes When Removing a Director

The process of removing a director often leads to wider disputes, particularly in smaller businesses or owner-managed companies.

Common issues include:

• Allegations of breach of fiduciary duties
• Disputes between shareholders
• Challenges to the validity of the removal process
• Claims for unfair prejudice
• Disagreements over the terms of exit

These disputes can quickly escalate into formal legal proceedings if not handled carefully.

Risks of Getting It Wrong

Failing to follow the correct procedure can have serious consequences, including:

• The removal being declared invalid
• Claims for breach of contract
• Employment tribunal claims for unfair dismissal
• Costly and time consuming litigation

In some cases, disputes may end up in the High Court, particularly where there are complex shareholder issues or significant financial interests at stake.

Practical Steps Before Taking Action

Before attempting to remove a director, businesses should:

• Review the company’s articles and any shareholder agreement
• Check all director service agreements and service contracts
• Ensure the correct procedure under the Companies Act 2006 is followed
• Take early legal advice

Taking these steps can help avoid unnecessary disputes and ensure the process is legally sound.

Resolving Disputes Around Director Removal

In many cases, removing a director is part of a wider breakdown in the business relationship. Rather than proceeding directly to formal action, it may be possible to resolve matters through:

• Negotiation
• Mediation
• Agreeing a managed exit

Alternative dispute resolution can often provide a quicker and more cost-effective solution than formal legal proceedings.

Speak to an Expert Today

At Expert Commercial Law, we provide access to a trusted panel of commercial solicitors and expert witnesses experienced in director and shareholder disputes.

We can connect you with specialists who can assist with:

• Removing a director under the Companies Act 2006
• Disputes involving service agreements and employment law
• Shareholder and board-level conflicts
• High-value commercial litigation

We are not a firm of solicitors, but we work with regulated professionals who can guide you through the process and protect your position.

Request a call today to speak to a commercial law solicitor or expert from our panel.

FAQs: Removing a Director in the UK

Can shareholders remove a director without consent?

Yes, shareholders can remove a director without their consent under the Companies Act 2006, provided the correct procedure is followed, including giving special notice and passing a resolution at a general meeting.

How much notice is required to remove a director?

Special notice of at least 28 days must be given to the company, and shareholders must receive at least 14 days’ notice of the general meeting where the proposed resolution will be voted on.

Can a director challenge their removal?

Yes, a director can challenge the process if it has not been followed correctly. They also have the right to submit written representations and speak at the meeting.

Does removing a director terminate their employment?

Not necessarily. Removing a director from office is separate from terminating employment. If they have a service agreement, employment law and potential unfair dismissal claims may apply.

What happens if the process is not followed correctly?

If the correct legal procedure is not followed, the removal may be invalid, and the company could face legal claims or disputes.