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Disputes between company directors and the removal of a director can cause huge damage to a business and be a stressful and costly experience for all concerned.
Our Dispute Resolution Team in Stafford, Newcastle-under-Lyme & Alsager can give you help and advice as soon as a director dispute arises. Often this early intervention can help to resolve the dispute quickly and in the most cost-effective way.
How can a Director be removed?
In the case of a limited company, the powers available to the board to remove a director will be set out in the company’s Articles of Association (‘the Articles’). It is also important to check the director’s service agreement, employment contract or letter of appointment for terms relating to termination of a director’s appointment.
It is important for the remaining director(s) to recognise as early as possible whether the substance of the dispute is sufficient for a director to be removed according to the Articles and other documents, as well as confirming the process required whether within the documents or s168 Companies Act 2006.
If you are a director who is being removed from a company then you need to be aware of your rights under the Articles service agreement, employment contract or letter of appointment, to ensure that the board is acting within its lawful powers.
Whichever side of the dispute you are on our specialist Solicitors can give you advice from the initial appointment to ensure your position is protected. Feel free to give us a call on 01785 252377 for Stafford, 01782 987551 for Newcastle-under-Lyme, or 01270 446260 for Alsager.
Fiduciary Duties
Directors have a fiduciary duty to act in the best interests of the company.
Often director disputes arise when one or more of the directors is accused of doing something which is damaging to the partnership. Examples of this type of conduct include:
- Diverting clients
- Taking unauthorised payments
- Not performing their duties
- Acting in competition with the company
Directors who own shares
Many directors will own shares in the company. A company should always check the terms of the Articles and the shareholders’ agreement (if there is one) to see what will happen to the shares when the director is removed.
Settlement Agreement
It is possible to use a settlement agreement to formalise a director’s departure from a company, if all parties can agree on terms. This is potentially the least costly route for all parties to take.
Our specialist Solicitors can draft agreements to meet your requirements or advise directors upon agreements which they have been asked to sign.
Why the Nowell Meller Disputes Team is the right choice for you
We believe that it is important to try to resolve disputes without Court proceedings where possible, as this is often the quickest and most cost-effective way to get the result you need.
However, if a settlement cannot be reached our experience in litigation and strong advocacy skills will put you in the best place to succeed in your dispute.
If you need advice in a Director Dispute please do not hesitate to speak to one of our friendly team members on 01785 252377 for Stafford, 01782 987551 for Newcastle-under-Lyme, or 01270 446260 for Alsager.
