Director Removal

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Removing a director is a serious decision that must be handled carefully and in accordance with the law. Mistakes can expose the company to claims, and damage its reputation.

At Francis Wilks & Jones, we guide shareholders and boards through the correct process for removing a director under the Companies Act 2006. Our commercial lawyers combine legal precision with practical experience to protect your position, manage risk, and ensure continuity within the business.

When can a director be removed from office?

A director can be removed for many reasons, including loss of trust, persistent disagreement, or misconduct. Common examples include:

• breach of statutory or fiduciary duties
• poor performance or failure to carry out agreed responsibilities
• damaging behaviour or conflicts of interest
• a breakdown in confidence between shareholders and management

The law gives shareholders the power to remove a director, but only if the correct legal procedure is followed. The right arises under section 168 of the Companies Act 2006, subject to any restrictions in the company’s articles of association.

What is the legal process for removing a director?

The formal process is set out in sections 168-169 of the Companies Act 2006. It involves several key stages that must be followed precisely:

1. Special notice – at least 28 clear days’ written notice must be given of the intention to propose a resolution to remove a director.
2. Board circulation – the company must circulate this notice to all members and to the director concerned.
3. Right to respond – the director has a statutory right to make written representations and to be heard at the meeting where the vote will take place.
4. Shareholder vote – the resolution must be passed by a simple majority (more than 50%) at a general meeting.
5. Companies House filing – the company must file a form TM01 and update its records within 14 days of removal.

Failure to follow any of these steps correctly can render the decision invalid or expose the company to legal challenge.
Our team ensures each step is documented properly and that the process complies with both the law and your company’s constitution.

What alternatives exist to formal removal?

Not every situation requires a formal resolution. In many cases, a negotiated exit or re-organisation can achieve the same result without public confrontation.

Possible alternatives include:

• Voluntary resignation – agreeing terms for the director to step down.
• Share buy-out or sale – allowing the departing director to realise value for their shares.
• Mediation or private negotiation – finding common ground through discussion before positions harden.

Our lawyers often resolve management conflicts through confidential and discreet negotiation, protecting both the business and personal relationships.

What are the risks of removing a director?

Removing a director can have significant legal and commercial consequences. If the process is mishandled, it may trigger claims against the company or the remaining shareholders.

Potential risks include:

• Unfair prejudice petitions under section 994 of the Companies Act 2006 – if the removal is seen as unfairly prejudicial to a shareholder.
• Employment claims – if the director is also an employee, they may allege wrongful or unfair dismissal.
• Breach of shareholders’ agreement – if contractual rights are ignored.
• Director retaliation – for example, by blocking decisions or withholding company information.

We work proactively to identify and manage these risks. Our advice balances the need for decisive action with protection against future challenge.

What happens after a director is removed?

Once a director has been removed, a number of follow-up steps are required to maintain good governance and protect the company. These may include:

• notifying Companies House and updating company records
• collecting company property such as laptops, keys and documents
• updating bank mandates and internal authorisations
• reviewing insurance, employment, and shareholder agreements
• assessing any ongoing liabilities or potential claims

In some cases, the company may also need to investigate breaches of duty under sections 171–177 of the Companies Act 2006 or consider pursuing a Derivative Claim under section 260 of the Companies Act 2006 to recover losses.
Our lawyers manage these post-removal steps efficiently and discreetly to protect business continuity.

Our shareholder disputes team at FWJ includes

Andrew Carter (Partner)

Andrew Carter is a commercial litigation partner with extensive experience resolving shareholder and partnership disputes. He acts for business owners, directors and investors in complex conflicts over control and value. Clients trust his calm, strategic approach and focus on achieving practical, commercial outcomes.

Gemma Newing (Senior Associate)

Gemma Newing is a commercial litigation solicitor with strong experience in contractual and company disputes. She acts for businesses and shareholders in complex claims requiring clear strategy and efficient resolution. Clients value her focus, responsiveness and commitment to achieving practical results.

Anna Beetson (Solicitor)

Anna Beetson advises SMEs, directors and shareholders on commercial and company disputes, with a focus on efficient and practical resolution. She combines strong technical knowledge with a clear, client-focused approach. Her work covers contractual claims, shareholder disagreements and boardroom issues.

Athena Kam (Paralegal; Unregistered Barrister)

Athena Kam supports clients across commercial litigation, director disqualification and debt recovery matters. Drawing on her background as an unregistered barrister, she brings analytical precision and attention to detail to every case. She assists in preparing evidence, drafting submissions and managing proceedings efficiently.

Contact us today for assistance

At Francis Wilks & Jones we deal on a day-to-day basis with all matters of company legislation and procedure, including shareholders meetings and resolutions. It is vital that if shareholders wish to remove a director, that they follow the correct procedure, or the resolution could later be found to be invalid and the director will remain in role. If you are a shareholder considering removing a director, speak to one of our expert team today to review your options as soon as possible.

Francis Wilks & Jones were responsive, available at all times to deal with any of my queries and very reassuring. I would definitely recommend them to deal with proceedings brought on behalf of shareholders – they understood our practical needs.

A shareholder we helped bring unfair prejudice proceedings against a fellow shareholder who had been interfering with the management of the company and damaging its value