How Do I Appoint or Remove a Company Director in the UK?

Summary

• A company can appoint a director by following its articles of association and obtaining the individual’s consent to act. 
• Directors can be removed in several ways, including resignation, provisions in the company’s constitution, or by shareholders passing an ordinary resolution. 
• In the UK, shareholders can remove a director by a simple majority vote, even if agreements suggest otherwise. 
• This guide explains how to appoint and remove company directors for UK business owners, including key steps, risks and legal requirements.
• It is prepared by LegalVision’s business lawyers, a commercial law firm that specialises in advising clients on corporate governance matters.

Tips for Businesses

Check your articles of association and any shareholder agreements before appointing or removing a director. Follow the correct notice and voting procedures, obtain consent or resignation where required, and update company records promptly to ensure the change is valid and enforceable.

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On this page

• Appointing a Director
• Removing Directors
• Key Takeaways
• Frequently Asked Questions

Appointing or removing a company director involves following formal legal and governance procedures to ensure the company’s leadership is properly authorised and compliant with company law. Appointments must meet eligibility requirements and follow the company’s articles, while removals typically require shareholder approval and proper notice to be valid.  This article explains how to appoint and remove a company director and the key legal steps your business must follow.

Appointing a Director

Legal Requirements for Directors

Before appointing a director, ensure the candidate meets the statutory requirements:

• Age: Directors must be at least 16 years old. There is no maximum age limit.
• Natural person requirement: Every company must have at least one director who is a natural person (not a corporate entity). Whilst companies can have corporate directors, at least one natural person director is mandatory.
• Disqualifications: You cannot appoint someone who is:
  • subject to a disqualification order under the Company Directors Disqualification Act 1986;
  • an undischarged bankrupt (without court permission);
  • a former director of a company that entered insolvent liquidation, if you are appointing them to a company with a similar name within five years (the “phoenix company” provisions under the Insolvency Act 1986); or
  • the company’s auditor.
• Criminal convictions: Individuals with certain fraud or dishonesty convictions may be disqualified from acting as directors. Check whether any convictions trigger disqualification.

Appointment procedures under the Companies Act 2006

The Companies Act 2006 provides the statutory framework but largely defers to a company’s articles regarding appointment procedures. However, it establishes certain mandatory requirements:

• Consent: The appointee must consent to act as director. This is typically evidenced by signing a consent to act form.
• Minimum number: Section 154 requires every private company to have at least one director.
• Register of directors: Section 162 requires companies to maintain a register of directors containing prescribed particulars.
• Notification: Section 167 requires companies to notify Companies House of director appointments within 14 days using Form AP01.

Appointment Under Model Articles

If your company uses the Model Articles (as prescribed under the Companies Act 2006), the appointment process is straightforward.

• Appointment by directors: Under Model Article 17, directors may appoint a person as a director either to fill a vacancy or as an additional director. The appointment takes effect from the date specified in the resolution or, if no date is specified, from the date of the resolution itself.
• Appointment by shareholders: Under Model Article 17, shareholders may also appoint directors by ordinary resolution (requiring more than 50% of votes cast).

Appointment Under Bespoke Articles of Association

Companies with bespoke articles may have tailored appointment procedures. Common variations include:

• Enhanced requirements: Some articles require a higher voting threshold (e.g., 75% of directors) to appoint new directors.
• Founder or investor rights: Articles may grant specific shareholders or classes of shareholders the right to appoint or nominate directors to the board.
• Approval requirements: Certain appointments may require approval from specific shareholders or classes of shareholders.
• Restrictions on numbers: Articles may cap the maximum number of directors or require a minimum number beyond the statutory requirement.

Always review your specific articles carefully to identify any special procedures or restrictions.

Appointment Under Shareholders’ Agreements

Shareholders’ agreements often contain provisions affecting director appointments that sit alongside the articles:

• Nomination rights: Investors frequently negotiate the right to nominate one or more directors to the board, often linked to their shareholding percentage.
• Board composition: Agreements may specify the board’s composition, including the number of investor directors, founder directors, and independent directors.
• Approval requirements: Some agreements require unanimous or supermajority shareholder consent for certain director appointments.
• Removal and replacement: Agreements typically grant shareholders with nomination rights the corresponding right to remove and replace their nominated directors.
• Deadlock provisions: Agreements may include mechanisms for resolving disputes over director appointments.

Shareholders’ agreements are contractual and binding between the parties. Breaching these provisions may give rise to claims for damages or injunctive relief.

Formalities Following Appointment

Once a director is appointed, complete the following steps:

• Update company registers: Record the appointment in the register of directors and register of directors’ residential addresses
• File with Companies House: Submit Form AP01 within 14 days of the appointment. 
• Identity verification: New directors must complete the Companies House identity verification process and provide their 11-character personal code when filing their appointment. This requirement, introduced to combat fraud, applies to all new director appointments.
• Service contract: If the director is also an employee, prepare and execute a service contract or letter of appointment setting out their terms of employment. Alternatively, the director might be a non-executive director, and should enter into a non-executive director agreement as a contractor to the company. 

Removing Directors

Resignation

A director may resign at any time by giving notice to the company. No specific notice period is required unless specified in the articles or the director’s service contract.

Resignation should be in writing and delivered to the company. It takes effect from the date specified in the notice or, if no date is specified, when the notice is received.

Removal Under Model Articles

The Model Articles provide for automatic termination of a director’s appointment in certain circumstances.

Model Article 18 specifies that a director ceases to hold office if they:

• cease to be a director by virtue of any provision of the Companies Act 2006 or are prohibited from being a director by law;
• become bankrupt or make any arrangement or composition with their creditors generally;
• are, or may be, suffering from mental ill health and either a registered medical practitioner gives a written opinion to that effect or a court makes an order on that basis;
• resign by notice to the company; or
• have been absent without permission from board meetings for six consecutive months and the directors resolve to remove them.

Removal Under the Companies Act 2006

Section 168 of the Companies Act 2006 gives shareholders an overriding statutory right to remove any director by ordinary resolution. This is regardless of anything in the articles or any agreement between the company and the director.

To remove a director under section 168, the company must:

• receive special notice of the resolution at least 28 days before the meeting at which it is to be moved; and
• send a copy of the notice to the director concerned immediately upon receiving the notice.

Moreover, the director is entitled to:

• make written representations (of reasonable length) and require the company to circulate them to shareholders; or
• be heard at the meeting.

To remove a director, shareholders must pass an ordinary resolution (simple majority of votes cast) at a general meeting (written resolutions are not permitted). The meeting requires 28 days’ notice due to the special notice requirement, which supersedes the standard 14-day minimum.

A director can block their own removal under section 168 if their shares carry enhanced voting rights on such resolutions. Check the company’s articles before proceeding.

Removal Under Bespoke Articles

Bespoke articles may provide additional removal mechanisms:

• Board removal powers: Some articles grant the board power to remove a director by board resolution, often requiring a supermajority or unanimous vote (excluding the director in question).
• Shareholder class rights: Articles may give specific shareholders or classes the right to remove directors they appointed.
• Enhanced thresholds: Articles may require a higher voting threshold than an ordinary resolution for removal, though this cannot override the section 168 right.
• Automatic termination events: Articles may specify additional circumstances triggering automatic termination, such as:

• breach of fiduciary duties;
• conviction of certain criminal offences;
• failure to attend a specified number of board meetings; or
• ceasing to hold a required shareholding.

Removal Under Shareholders’ Agreements

Shareholders’ agreements frequently address director removal:

• Removal of nominated directors: Shareholders with nomination rights typically have the corresponding right to remove and replace their nominated directors at will.
• Removal for cause: Agreements may specify grounds for removing directors, such as gross misconduct, breach of duties, or criminal conviction.
• Consent requirements: Some agreements require consent from specific shareholders or classes before removing certain directors.

Removal Under Other UK Statutes

For removal under other UK statutes, you can consider the following:

• Company Directors Disqualification Act 1986: The court may disqualify a person from acting as a director for up to 15 years if they are found guilty of certain offences or their conduct as a director makes them unfit. Disqualification automatically terminates any existing directorships.
• Insolvency Act 1986: When a company enters administration or liquidation, the administrator or liquidator effectively takes control, and the directors’ powers are suspended or cease. Directors are not formally removed but can no longer exercise their powers.
• Enterprise Act 2002: The Secretary of State may apply for a disqualification order against directors of companies that have become insolvent, based on unfit conduct.
• Criminal Justice Act 1993 and Fraud Act 2006: Directors convicted of insider dealing or fraud may be disqualified from acting as directors.

Formalities Following Removal

Following a director’s removal: 

• Update company registers: Record the termination in the register of directors, noting the date the directorship ceased.
• File with Companies House: Submit Form TM01 (Termination of Appointment of Director) within 14 days of the termination.
• Return company property: Ensure the former director returns all company property, documents, and confidential information.
• Notify third parties: Inform banks, suppliers, and other relevant third parties of the change, particularly if the director was an authorised signatory.

An improperly appointed director’s decisions may be invalid. However, section 161 of the Companies Act 2006 protects third parties who dealt with the company in good faith.

Minority shareholders can apply to the court under section 994 of the Companies Act 2006 if the company handles director appointments or removals in a way that unfairly prejudices them.

Corporate Governance Guide for SMEs in the UK

This guide will help you to understand your corporate governance responsibilities as a director, including the decision-making processes

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Key Takeaways

Appointing and removing directors involves navigating multiple layers of regulation: 

• the Companies Act 2006; 
• your company’s articles of association; and 
• any shareholders’ agreements. 

The Model Articles provide a straightforward framework for most private companies, but bespoke articles and shareholders’ agreements often introduce additional requirements and rights. Shareholders have a statutory right to remove directors by ordinary resolution under section 168, which cannot be excluded. Always follow the correct procedures and meet filing deadlines to avoid penalties and potential legal challenges.

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Frequently Asked Questions