What is a Removal Of Director Resolution?
A Removal of Director Resolution in England and Wales is a shareholder resolution passed under section 168 of the Companies Act 2006 to remove a director from office. It requires at least 28 days' special notice under section 169, entitling the director to make representations. After the resolution passes, the company must file form TM01 with Companies House within 14 days.
About the Removal Of Director Resolution
A Removal Of Director Resolution is a formal corporate document that legally removes a sitting director from your company's board. This resolution serves as official documentation of the board's or shareholders' decision and creates a permanent record for your corporate files. You'll need this document to comply with state corporate laws and maintain proper governance standards.
When do you need this document?
You'll need a Removal Of Director Resolution when a director must be removed due to poor performance, breach of fiduciary duties, criminal conduct, or failure to attend board meetings. This document is also necessary when conflicts of interest arise that cannot be resolved, when a director becomes incapacitated, or when strategic changes require different board expertise. Public companies may need this resolution to comply with SEC reporting requirements, while private companies use it to maintain orderly governance and protect against potential litigation.
Key legal considerations
The resolution must specify whether removal is "with cause" or "without cause," as this affects the director's rights to compensation and legal recourse. You must follow proper notice requirements as outlined in your corporate bylaws and applicable state law. The voting thresholds for removal vary by jurisdiction and company type—some require simple majority approval while others demand supermajority or unanimous consent. For publicly traded companies, you'll need to consider SEC disclosure obligations and potential impacts on director and officer insurance coverage. The resolution should clearly state the effective date and address any ongoing committee appointments or corporate roles held by the removed director.
Legal requirements in United States
Under United States corporate law, removal procedures are governed primarily by state incorporation laws, with Delaware General Corporation Law being most prominent for many corporations. Most states follow the Model Business Corporation Act, which generally allows shareholders to remove directors with or without cause unless the articles of incorporation specify otherwise. You must provide adequate notice of the meeting where removal will be considered, typically 10-60 days depending on state requirements. The resolution must be properly documented in corporate minutes and may require filing with state authorities. For publicly traded companies, removal of directors triggers disclosure obligations under federal securities laws, including Form 8-K filings with the SEC within four business days. Some states have specific protections for certain types of directors, such as those elected by cumulative voting or representing preferred shareholders.
Governing law
Applicable law
This Removal Of Director Resolution is drafted to comply with England and Wales law. Key legislation includes:
- Companies Act 2006, section 168: Gives shareholders of a company registered in England and Wales the right to remove a director by ordinary resolution at a general meeting, even where the company's articles provide otherwise, subject to special notice requirements.
- Companies Act 2006, section 169: Requires the company to give special notice of at least 28 days before the meeting at which a removal resolution will be proposed, and entitles the director to make representations to shareholders.
- Insolvency Act 1986: Relevant where a director's removal occurs in the context of financial distress, as it governs director duties in the period approaching insolvency.
- Companies Act 2006, sections 170-177: Set out directors' general duties, which remain relevant during the removal process and may give rise to claims if the removal itself involves a breach of those duties.
- Employment Rights Act 1996: If the director is also an employee, the removal must comply with employment law, and dismissal without following a fair procedure may give rise to an unfair dismissal claim.
