Directors - Appointment and Removal Flashcards
(17 cards)
What governs procedure for appointing directors?
The Articles
What are the appointment options under the MA?
- By Ordinary resolution of shareholders
- By decision of the directors
What is a service contract?
Written contract of employment between a company and an executive director outlining duties, remuneration, notice, etc
Where must service contracts be kept?
At registered office, available for inspection by members
When is shareholder approval required for a director’s service contract?
For long-term service contracts
How may a director be removed under CA?
Shareholders may remove a director by ordinary resolution
How many days special notice is required for director removal?
28 days special notice
Can the board remove a director?
Not unless expressly permitted by the Company’s articles
Can a director who is also a shareholder vote on their removal?
Yes, in their capacity as shareholder, they may vote on the ordinary resolution to remove themselves
How may a director resign from the board?
By notice of resignation, which takes effect immediately - no board resolution required to accept resignation
What circumstances lead to automatic termination under MA?
- Disqualification
- IVAs
- Bankruptcy
- Long term physical or mental incapacity (declared by medical practitioner)
What are the grounds for disqualification?
- Fraudulent trading
- Wrongful trading
- Persistent breaches of company law
What is the maximum disqualification period?
Up to 15 yrs
Is it a criminal offence to act while disqualified?
Yes - a disqualified person must not participate in management without leave of the court
How does retirement by rotation work in public companies?
Under MA for public companies, director retire every 3 year, with reappointment requiring shareholder approval
What is the rule for directors of listed companies?
They are subject to annual re-election by shareholders
What must companies do when there are changes to director or secretaries?
Notify CH using:
- AP01 - Appointment of director
- TM01 - Termination of Appointment
- AP03/TM02 - For secretaries
