Generally, a majority of shareholders can remove a director by passing an ordinary resolution after giving special notice. … The director will however continue to own the shares and be entitled to their portion of any dividends declared.
The resolution to remove the director is passed by a simple majority (i.e. anything over 50%) of those shareholders who are entitled to vote, voting in favour.
As per Section 169 of the Companies Act, 2013, a company may, by ordinary resolution, remove a director, not being a director appointed by the Tribunal under section 242, before the expiry of the period of his office after giving him a reasonable opportunity of being heard.
Ordinarily, it is not difficult to remove a director, however, to do so you must own over 50 per cent of the votes of the shareholders. … If you can control over 50 per cent of the vote then you are obliged to provide special notice before passing the resolution to remove the director.
The shareholders can vote to remove directors from the board before their terms expire, with or without cause, unless the corporation has a staggered board. The shareholders can then vote to replace the directors they removed.
Rights of shareholders possessing at least 10% of shares
Right to demand a poll – in general, members holding 10% of voting shares (or five members who have the right to vote) can demand a poll in respect of a proposed resolution (s. 321).
Generally it is the shareholders that hold the power in the company with the directors being responsible for its day to day running. In most successful companies the directors and shareholders work closely together and are open and transparent about the actions and direction the company will take.
How do I legally remove a director?
Section 168(1) of the Act states that the shareholders can remove a director by passing an ordinary resolution at a meeting of the company. This process is complicated somewhat by the notice requirements set out in statute.
If the written resolution put to the shareholders is an ordinary resolution (see 8), the percentage vote required is a simple majority of the total voting rights of the shareholders. For a special resolution it is not less than 75% of the total voting rights of the shareholders.
It is important to remember that only the shareholders of a corporation can remove a director. The board of directors does not have the authority to remove a director.
How do I remove a director from a private limited company?
Procedure for removal of Director in Private Limited Company
- A Company has the power to removal of Director by passing an Ordinary Resolution, given the Director was not selected by the Central Government or the Tribunal.
- A Board Meeting will be called by giving seven days’ notice to every one of the Director.
What is a Bushell v Faith clause?
Bushell v Faith  AC 1099 is a UK company law case, concerning the possibility of weighting votes, and the relationship to section 184 of Companies Act 1948 (the predecessor of s 168 of the Companies Act 2006) which mandates that directors may be removed from a board by ordinary resolution (a simple majority of …