Made A Director Without Consent In Harris
Description
Form popularity
FAQ
Appointing a director A company's shareholders can appoint directors. This is usually done by passing an ordinary resolution in favour of the appointment (ie a majority of the shareholders agree to the appointment).
Section 168 provides that a company can remove a Director by passing an ordinary resolution at a meeting. Special notice is however required. On receipt of notice of an intended resolution to remove a Director, the company must send a copy of the notice to the Director concerned.
The company should hold a general meeting at the time and date fixed in the board meeting and obtain shareholders' approval for the appointment of the managing director through a resolution.
A director may be removed by: An ordinary resolution adopted at a shareholders' meeting by the persons entitled to exercise voting rights in the election of that director.
This is commonly known as a 'silent director'. While there is no general rule that prohibits this, it is important to understand the duties and obligations that arise if you have been appointed a director of a company.
Shareholders own the company by owning its shares and are often referred to as 'members'. Directors on the other hand, manage the business and its operations. Unless the articles of association state so, a director isn't required to be a shareholder, and a shareholder has no legal right to be a director.
For an ordinary resolution to be passed at the meeting to appoint a director, or directors, such resolution must be supported by more than 50% of the shareholders who are eligible to vote at the meeting.
Is it necessary to get a shareholder as a director of a company? No, the director is not required to hold the company shares. A person with no company shares can also be appointed as a director unless the AOA specifies that the company director must have shares in the company.
Shareholder Vote - In many jurisdictions, directors can be removed by a majority vote of the shareholders. If the company's bylaws allow, shareholders can call a meeting and vote to remove the director, even if they do not consent.
As per the 2013 Act, the removal of a director can only take place during a general meeting through the approval of an ordinary resolution. Notably, this condition is applicable unless the director in question was appointed either through proportional representation or under section 163.
