A company director can be appointed during company formation and at any time thereafter. Likewise, directors can resign or be removed at any point after incorporation, provided that such actions are approved by the members or existing directors; and in line with provisions in the Companies Act 2006, the articles of association, and any shareholders’ agreement and/or director’s service contract
Limited companies must always have a minimum of one natural (human) director. Therefore, if a sole natural director resigns or is removed from a company, a new director should be appointed beforehand or at the same time as the removal.
Appointing a director and Informing Companies House
The process of appointing a company director and informing Companies House is very simple. It can be done online or by post.
During the company formation process, the members (shareholders or guarantors) will decide who to appoint. In many cases, members appoint themselves as company directors.
After incorporation, director appointments need to be carried out using a formal process. For this, the director should sign a letter of consent confirming they wish to act as director for the company, and a majority of members must approve the appointment of a new company director by passing an ordinary resolution.
In many companies, the appointment of a director can also be approved by the existing board of directors.
Once the appointment has been made, you must notify Companies House and provide the following details on form AP01 Appointment of Director within 14 days:
- company name
- company registration number (CRN)
- date of appointment of new company director
- title, full forename(s) and surname, including any former name(s)
- date of birth
- residential address
- service address
- occupation
- nationality
If you wish to appoint a corporate director, then the process is exactly the same. However, the company that the corporate director is being appointed to must have at least one other director who is a natural person.
The following details of the corporate director must be submitted to Companies House on form AP02:
- company name
- company registration number
- date of appointment
- registered name and number of corporate director
- registered office or principal address of corporate director
- registration place of corporate director
- legal form and governing law (for non-EEA corporate directors)
The 1st Formations free Online Company Manager is the quickest and easiest way to file this information online. Information is sent electronically to Companies House, and the public register is updated with the new details within 48 hours.
The company’s statutory register of directors should also be updated as soon as possible. This record is kept at the registered office or SAIL address and must be made available for public inspection.
Do I need to provide a director’s middle name?
Companies House requests the surname and full forename(s) of all appointed directors. Whilst there is no legal requirement to include directors’ middle names, this information may be requested by banks, lenders, and other third parties at some stage during the life of a company. If this information is not displayed on Companies House, then that may cause issues.
If there is no significant reason to withhold a middle name, it would be best to avoid any potential problems by simply including it at the time of company formation or whenever a new director is appointed.
What does Companies House mean by director’s ‘occupation’?
When you appoint a company director, you will be asked to provide their ’occupation’.
Directors do not require any formal qualifications. The role is predominately managerial and administrative, but many individuals also have specific professions or business occupations in addition to their role as a company director.
Often, their occupation will form a large part of their role as a director; e.g., if they are a qualified accountant or lawyer, a sales or marketing executive, an IT specialist, an HR manager, a chartered secretary, etc.
You can, therefore, list a director’s occupation as a specific profession, if applicable. Alternatively, you can state ‘Director’ or simply leave that section of the appointment form blank.
How to change a director’s details at Companies House
With the exception of a director’s date of birth, you can change any details that have been registered at Companies House using the form CH01. In the majority of circumstances, it is very quick and easy to make such amendments through the 1st Formations free Online Company Manager.
Companies House will update these details on the public register within approximately 48 hours.
If the wrong date of birth has been registered for a director, the only way these details can be changed is by filing a replacement appointment form or, if the incorrect date was added on incorporation, through the use of the RP02A and RPCH01 forms.
Are details of company directors made available to the public?
Yes, all directors’ details submitted to Companies House at the time of their appointment will be displayed on public record, with the exception of home addresses and the ‘day’ element of the director’s date of birth. However, if a company director chooses to provide a residential address as their service address, these details will be placed on public record.
How to remove a company director
A company director can be removed for a number of reasons, but the resignation or termination must be in accordance with the terms of the Companies Act 2006, the articles of association, the shareholders’ agreement (if applicable), and any service agreement between the director and the company.
You must ensure that your company has at least one natural director appointed at all times; therefore, you should take this into account if the sole director is leaving or being removed.
Voluntary resignation
If a director resigns within the terms of his or her contract, or you ask a director to take voluntary resignation to avoid dismissal proceedings, you should notify Companies House online or by post using Form TM01 within 14 days of the resignation.
The public register will be updated to reflect this information, and the company’s statutory register of directors must also be updated accordingly.
Removal under the articles of association
The model articles of association contain a number of provisions that require the immediate removal of a director in the following circumstances:
- A provision of the Companies Act 2006 or any other UK legislation prohibits a director from remaining in office.
- A bankruptcy order is made against a director.
- A director is deemed physically incapable of remaining in office by a registered medical practitioner.
Removal by ordinary resolution of members
If the reason for termination is not covered in the articles of association, the shareholders can remove a director by passing a resolution under section 168 of the Companies Act 2006. This procedure is often used when shareholders are unhappy with the general performance of a company director.
Provided the reason for dismissal doesn’t violate any legislation or contractual agreement, the shareholders can pass an ordinary resolution with a simple majority vote (above 50%).
To pass an ordinary resolution, shareholders must be given ‘Special Notice’ of at least 28 days before the vote is taken at a general meeting. The director in question must also be notified to allow them to attend the meeting and make representations.
If a majority vote is achieved, Form TM01 must be filed at Companies House within 14 days of the termination.
Removal by the Court or other authority
If a company director fails to maintain their statutory duties and responsibilities, or their conduct is deemed ‘unfit’ for any other reason, an official complaint can be made to the Insolvency Service by any member of the company or public.
A company director can also be disqualified by the Court, Companies House, HMRC, the Competition and Markets Authority, the Financial Conduct Authority, or a company insolvency practitioner.
‘Unfit’ conduct is categorised as:
- Continuing to trade to the detriment of creditors when a company is insolvent (unable to pay its bills)
- Failing to keep proper accounting records
- Failing to prepare and file annual accounts and/or confirmation statements
- Failing to deliver tax returns and/or pay tax liabilities to HMRC
- Failing to co-operate with an insolvency practitioner or the Official Receiver
How to notify Companies House
You can notify Companies House about the removal of a director using 1st Formations Online Company Manager. Our software filing service also allows you to file copies of resolutions, if applicable, to support the termination. Information is sent electronically to Companies House, and the public register is updated accordingly within approximately 48 hours.
You may notify Companies House about a new director appointment at the same time if required.
Can a company director be disqualified?
If a director fails to meet the legal requirements of the role, as outlined in the Companies Act 2006 and the articles of association, they can be removed from the company and disqualified as a director.
Any person who is a disqualified company director is prohibited from holding such a position in any other company for the duration of the ban.
Disqualified directors can be banned for a period of up to 15 years. They are also prohibited from being the director of a foreign company with UK connections; being involved in forming, marketing or running another company; or being a member (partner) of a Limited Liability Partnership (LLP).
Any violation of the terms of a disqualification order can lead to a considerable fine or a prison sentence of up to 2 years.
Causes of director disqualification
Company directors can be immediately disqualified in the following circumstances:
- do not meet the minimum age requirement of 16
- declared bankrupt or subject to any bankruptcy proceedings
- served with a Debt Relief Order
- continuing to trade when a company is insolvent (unable to pay its bills)
- failure to maintain accurate accounting records
- failure to file annual accounts and/or confirmation statement at Companies House
- failure to pay corporation tax or any other due taxes
- using company finances or assets for personal gain or benefit
- failure to maintain any other statutory duties as per the Companies Act 2006
Applications to investigate a director’s conduct can be made to Companies House, the Court, the Insolvency Service, or an insolvency practitioner. Following a complaint, a letter will be sent to the director outlining the allegations, the intention to proceed with the disqualification investigation, and the ways in which the director is entitled to respond.
Any company director who is under investigation should seek legal advice and proceed in one of three ways:
- await notification of a court date for disqualification
- defend the allegations if believed to be untrue
- avoid court action by initiating voluntary disqualification
After disqualification
Details of disqualified directors are added to the Disqualified Directors Register by Companies House. This information is available to all members of the public. In some situations, it is possible to apply to the Court to revoke a ban or to lift the restrictions of bankruptcy, but such applications are assessed on a case-by-case basis.
Can I resign if I am the sole company director?
If you wish to resign as the sole director of a company in which you own shares, you may appoint another director to run the business on your behalf. Alternatively, if your company is solvent, you can sell the business and its assets to someone else, or dissolve (close) it and sell its assets.
Appointing a new director to manage the company
If you wish to maintain ownership and hand the reigns over to someone else, you can remain as a shareholder and choose an experienced individual to run the business for you.
As a shareholder, you will retain the same percentage of ownership and control (unless you sell some of your shares) and you will still be entitled to receive surplus profits through dividend payments. You will also remain fully liable for contributing the value of your shares toward company debts.
To appoint a new company director, the prospective director should sign a letter of consent to act, after which you should (in your position as director) resolve to appoint that person to the board.
Afterward, you must file form AP01 at Companies House. Once completed, you should now be able to resign.
Selling the company and assets
A limited company exists as a distinct legal entity that is separate from its owners. This means you can sell it to someone else. Selling a company can sometimes be difficult, particularly in the current financial climate, but if your business is viable, profitable, and sustainable, you may stand a good chance of attracting a buyer.
This all depends on certain factors like current market conditions, the value of your business, the availability of potential buyers, financial regulations, interest rates on borrowing, and market trends.
To increase your chances of selling your company, your business should pose minimal risk to any potential buyer, which depends on several factors:
- profitability (past, present, and future)
- brand image and reputation
- customer base and retention rates
- relevance of products and services offered
- potential for growth
- sustainability of the business
The decision to sell should not be made in haste. You must take the time to think critically and explore all of your options. Do your own research and speak to professional advisors.
If you do decide to sell, discuss your options with a solicitor to ensure all legal requirements are met.
Dissolving the company
As the owner of a company, you are entitled to close your business and have it struck off the register. To apply to Companies House to have it closed, you must prove that it is solvent (able to pay its bills), that it hasn’t traded for at least 3 months, and that all bills and debts have been paid.
As part of the company dissolution process, you will be required to inform all relevant parties associated with your company that you are planning to close. You should contact HMRC to pay any remaining tax liabilities, and you should file annual accounts and a Company Tax Return.
If there is any capital left over after the payment of all bills and liabilities, this is yours to keep.
The closure of the company will be advertised by Companies House in your local Gazette. This is to allow objections to be raised by any third parties (e.g. creditors) who may oppose the closure. All being well, it will be struck off and closed within 3 months.
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Thank you for your kind words – we’re glad you enjoyed our article.
Regards,
John
Having suddenly resigned from a company where I was director. There is another director, and. I too was director. How can I tell company house cancel my resignation?
Thank you for your kind enquiry.
In general terms, it is not possible to ‘cancel’ the resignation of a director – Companies House provides no mechanism to allow you to do this.
The only option would be to get you appointed as a director to the company, which you can do by following the steps in our blog article.
I trust this information is of use to you.
Regards,
John
There are 5 directors in a company that runs a block of flats and one is the chairman, 3 do nothing except agree with him and the other one is the only one who holds the chairman to account.
The chairman, who is also the secretary, treasurer, manager and sole paid person, doesn’t like being questioned so has asked the involved director to resign. Next he will get the others to vote that director out.
What options does the involved director have?
The day to day running of the company is fine, all documents are filed properly, but the chairman is using company money to repair his flat, as one example.
Hi Mike,
Thank you for message.
In such instances, we would recommend seeking legal advice. In particular, with respect to the removal of the director, this has to be approved by the Members of the company using a strict procedure, so it is important that the director in question in supported and the procedure carried out correctly. We would be happy to provide you with a referral to a solicitor to assist you in this matter. Please email us on cosec@1stformations.co.uk and we shall arrange this in the first instance.]
Kind regards,
John
hi, i have a bit of a question, i just wanted to seek clarification in terms of removing a person holding office in a company, be a secretary, director etc. suppose a company plans to remove a secretary from office but then they did not follow all the procedures of removing a member from office contrary to what is stipulated in the company’s article of association, however, the majority of the shareholders voted in favor of his/her removal. can he/she go forward to obtain court injunction restraining the company from proceeding with their plans? or what can be advise to the company and the secretary?
Hi Kondwani
Thank you for your message.
The removal of a company officer requires the company to follow a strict procedure. If the removal is currently underway in such a manner that contravenes the required process, it may be possible for the courts intervene and direct the company to cease this action. If the removal has already taken place, and the correct procedure were not followed, it may be possible for the company officer who lost his office, to take legal action against the company.
We would of course suggest seeking legal advice in such circumstances.
Kind regards,
Graeme
Hi,
My brother and I registered a company. Initially it’s registered in his name. Now due to a possible conflict of interest we need to make me the director and take him off. What form is best? Also, I believe it’ll show that my brother was once a director. Can this be hidden or deleted?
Thanks
Hi Dami
Thank you for your comment.
To appoint a director you should use Form AP01, and to terminate the appointment of a director you should use Form TM01. Alternatively, 1st Formations provides a Director Appointment & Resignation Service at a cost of £19.99 plus VAT per appointment or resignation.
Due to your brother’s prior association with the company, his details will still be visible on the public record, however, he will be listed as a ‘resigned’ director rather than an ‘active’ one.
It requires a Court Order to remove an ex-director’s details from the Companies House website, which would only usually be granted in matters of personal security, i.e. the displaying of the person’s details on the public record constitutes a risk to personal safety and security.
Kind regards,
Graeme
Hello, I have a question. A new director was appointed to the company I work for by the shareholders. The first meeting with him confirmed our worst fears: he was incompetent, refuses to study or listen to any of his subordinates and his orders are totally absurd. I’m an HR officer, how should I handle this case, seeing that the staff have been complaining about him and most of them are even threatening to resign including out top managers. Please help
Hi Lilian
Thank you for your comment.
We cannot comment with regards HR or employment matters as this is outside of our expertise. However if the shareholders decide they would like to remove the person as a director, this is commonly carried out by passing an ordinary resolution of members. There is a procedure for passing such a resolution which is explained in this blog.
Kind regards,
Graeme
Hello There,
I am one of the director of a small Charity (registered as a company – limited by guarantee). There are no share holders but several directors (which are trustees too).
We have noticed an increase case of act of harassment from one director who has been either found to be spreading rumours or demeaning another director. It has also been noticed that this director always targets one or two directors in the groups and has been harassing and bullying.
As we are a small charity / organisation, we do not have a matured HR / Anti-Bullying policy.
How do we get the director removed from the company / charity?
Please help!
Rajat
Hi Rajat
Thank you for your comment.
We are unable to provide you with professional advice on this matter and we would recommend taking legal advice from a solicitor. We have no knowledge of your articles of association, which may deal with this matter in a specific manner.
We would; however, suggest that removal of a director, where the company is dissatisfied by their performance or conduct, is commonly carried out by passing an ordinary resolution of members. There is a procedure for passing such a resolution which is explained in this blog.
Kind regards,
Graeme
Dear Tshepo,
Thank you for your message. I am sorry to hear your business partner has passed away. If your partner was a director, then you should file the TM01 form at Companies House to notify they are no longer an active director of the company. This can be done through our Online Company Manager, which can be used by any UK company even if they are not existing customers with us. It is also recommended that the company note the director’s passing in a set of minutes. If your partner was also a shareholder of the company, then the shares will pass into her estate, much in the same way any other property would. It will then be up to the executors of her estate to decide what to do with her shares (for example, transfer them out to someone else). Whatever the executors authorise, the new holder of the shares will need to be reported at Companies House using the Confirmation Statement – you may be interested in using our Confirmation Statement Service for this, for which we’ll prepare and file your confirmation statement on your behalf.
Kind regards,
1st Formations
Hi, I am the only Director of a residential management company which deals with 2 blocks of private flats. We should have 2 directors but no-one wanted to take on the role with me in 2010 so I’ve been doing it myself. I worry that this is a breach of the companies articles.
The residents are the shareholders and I deal with collecting management fees, annual returns, gardening, outside maintenance, buildings insurance, change of ownership etc. Its a non profit company.
I want to resign.
None of the other 35 shareholders want to volunteer to take over.
Can I resign?
Do I need to find a new director first?
Can I appoint a property management company to manage the day to day running of the company, collect money, pay bills and deal with the maintenance.
The reason I want to resign is that I can no longer deal with the petty neighborly disputes and complaints about each others noise, pets, children, parking, laundry, arguments etc. They expect me to get involved and I have to live in the property too so I am becoming hated by everyone around me.
Hi Rachel,
Generally, it is not recommended that a director resigns if it means that the company is left without any appointed directors, as this means the company will be left in default (not compliant with the Companies Act 2006). A new director should be in place before the existing one resigns. Oftentimes, a property management company can indeed take up the role and manage the day to day running of the company. You’ll want to make sure, however, that the articles allow for external persons to act as a director (in some cases, there may be a requirement that only the members of the company can act as directors).
Best regards,
Rapid Formations
Is it illegal for two directors of a limited company to be paid different amounts of dividends?
Hi Lyn,
Directors can only be paid dividends if they are also shareholders of a company. Different rates of dividends can only be paid to shareholders if they hold separate classes of shares that allow for variable dividend rates to be paid. This would need to be stated in the company’s articles.
Kind regards,
John Carpenter
Hello.
My partner is a director in there company and his ex wife has removed him as a director and replaced him with her boyfriend with out my partners permission or knowledge. Can she do this???? He has not had anything to do with the business for 4 years and has taken no profits from the business.the business is now in the process of liquidation as money is owed to HMRC.would he be liable for any of the debt.
Thanks Bex
Hi Bex,
A director cannot be removed from a company without the shareholders passing a resolution at a general meeting (special notice of this meeting needs to be provided to the director being removed). You may wish to seek legal advice on this matter.
Kind regards,
John Carpenter
When a Company Director is shown as having resigned, without his knowledge, and he has not submitted a Letter of Resignation to the Company of which he was a director is this a lawful action?
Dear Carl,
Thank you for your message.
The removal of a director can be done under various provisions so it could depend upon what options are available to those who have removed the director you have mentioned. I would suggest you seek the advice of a solicitor regarding your question.
Best regards,
1st Formations Team
My husband was the sole director of a company owned by his boss.. His boss forced him to resign as the boss wanted to appoint his new girlfriend’s aunt to the position of director. Who is responsible for changing the details at companies house following the forced resignation? My husband is still on the record as being the director and the unpaid VAT bills demands from HMRC are coming to him as a result. – and will we be liable for paying these fines and bills?
Dear Caroline,
Thank you for your message.
We are not solicitors so cannot advise on this matter as the particular circumstances and paperwork regarding the resignation of your husband would dictate the answer to your question.
Kind Regards,
1st Formations Team
Hi, I’m a director of a company which has fallen behind with vat payments , they are being paid back regularly with an agreed payment plan from the vat people.
If I resign and these payments don’t continue or the company files for bankruptcy after I’ve resigned, will I be liable for any loses ? There are other directors, my reasons for leaving are personal and do not have any relation to the outstanding vat ?
Dear Mark,
The question you have is a question for a solicitor. We are not solicitors so are not able to advise you in this case.
Best regards,
1st Formations Team
I have a limited company with my wife. I’m 51% and she is 49% directors.
What is the best way to get the business into my name ?
I want to do it properly and cleanly but don’t know where to go to get the simple answers like…Do I have to buy her out?…How do we calculate what’s the business is worth?….
Can you possibly advise me my next steps to achieving sole directorship?
kind regard’s
Lee
Dear Lee,
The process of transferring ownership of a company is something that would normally require professional advice due to the complexities which can arise for such changes. I would advise that you contact an accountant for the advice you require.
Best regards,
1st Formations Team
I own a “dormant” limited company that has not filed any accounts with Companies House since its inception. Back when the company was formed, I allowed a colleague to have his fiancee as a director of the company as an insurance against an advance he made me. That advance has been fully repaid, and since then, the colleague has been discovered to be an alcoholic, who in turn, got a drink driving charge against him. We parted company and I immediately resigned his fiancee for that reason as all advances had been repaid. The company has remained completely dormant with no money being paid in to it. In fact, I have only ever set up one Direct Debit on the company for a subscription to a professional membership, and I pay that in to the company out of my own personal money.
I resigned the fiancee in Feb 2014, and he has now started hassling me saying that resigning her was illegal, and against the law. I cannot see how that can be the case as there was no financial interest from the fiancee in the company, and the company is dormant and has never trading publicly.
Could you perhaps clarify this situation a little?
Thanks.
Hi Shaun,
If you are the only shareholder, you should be able to remove a director at any time but it must be in accordance with the provisions stated in the Companies Act 2006 and your articles of association. I cannot say whether your decision to remove this director was legal or not – I would suggest speaking to Companies House or a solicitor/accountant for clarification.
With regards your company’s dormant status – as long as you are not using company funds or have any transactions going through a business bank account in your company name, it should still be classed as dormant. However, if any Direct Debits or transactions (for example, your professional membership subscription) are being paid/received through the company bank account (regardless of whether your own money is used), your company is not dormant. In either case, you must still file accounts each year – dormant accounts to Companies House for a dormant company, or abbreviated accounts to Companies House and full accounts to HMRC if your company is active, i.e. funds are going through the company bank account.
I hope this helps.
Best wishes,
Rachel
Hello and thanks first for a great article.
I am new to this whole business thing …however i have seen in movies and TV shows that the very owner of the company gets thrown off board by its board of diectors. Does this really happen? I mean if i start a company from nothing with my own efforts and finance and it goes big….. and some guys one day tell me that i no longer own it , it ll be really bad..
Thanks in advance !!
Dear Sagar,
The main rules governing a company’s actions (including the treatment of directors/shareholders) are mostly contained in the company’s Articles of Association and if they are not conclusive on a particular matter you can refer to the most recent Companies Act (which is currently the 2006 Companies Act). There would need to be some very detailed and severe actions before the kind of actions you mention above could be undertaken.
Best regards,
1st Formations Team
Hello,
I want to resign from being a director and i don’t want my details to still be attached to the company…is that possible. Please i will appreciate a speedy response. thanks
Hi Sheila,
I’m afraid you will not be able to delete your details from the public record completely – they will remain there indefinitely even after resigning as a director. It will be clear, however, that you are no longer associated with the company because your resignation will be recorded on the public register.
I hope this helps.
Best wishes,
Rachel
Hi,
unfortunately my private circumstances has led me facing bankruptcy, I am the sole director of the company and really dont wish for it to be dissolved because of my mis-fortune and letting my clients down – can i appoint my partner as the company director while i go through this process? what if any are the implications in doing this and time scale?
many thanks in advance
Hi Mel,
I’m so sorry to hear that you find yourself in this difficult situation.
Because your company is a legal ‘person’ in its own right, your personal bankruptcy is separate from your company’s financial situation. However, you will not be permitted to continue acting as a company director (or secretary) until your bankruptcy has been discharged – this usually takes a year or two. You can, however, continue to remain a shareholder of the company.
You can certainly appoint your partner as the new director but I’m afraid I cannot offer any professional advice with regards running the business during your period of bankruptcy – you will really need to speak to a solicitor or accountant.
I presume you’ve explored every avenue, but this debt charity provides excellent help and advice: http://www.stepchange.org
Sorry I cannot be of more help. Best of luck with everything.
Rachel
If a company has two directors can one director appoint a new director without the other director knowing?
Hi Laura,
Generally, this will not be permitted – it is usually a decision that requires being made by the shareholders of the company. The specific rules for each company are outlined in the adopted articles of association, so I would advise referring to this governing document.
I hope this helps.
Best wishes,
Rachel Craig
Do you need to have a company bank account in order to appoint a Director?
Hi Matt,
You don’t need to have a business bank account to appoint a director.
Best wishes.