Directors play a crucial role in managing a company, but there are situations where their removal becomes necessary. Whether due to performance issues or other reasons, the process of removing a director involves legal steps. Let’s break it down:
Legal Framework
Under Section 206 of the Companies Act, the removal of a director must follow specific guidelines:
- Ordinary Resolution: A meeting must be called for the purpose of removing the director. During this meeting, an ordinary resolution (a majority vote) is passed.
- Notice: The notice for the meeting should explicitly state that the purpose is to remove the director.
- Director’s Representation: If the director responds within 14 days of receiving the notice, requesting copies of their representations to be sent to all shareholders, the company must comply. If the company fails to send these representations, the director can read them during the shareholder meeting.
Documentation
To satisfy legal requirements, the company should provide evidence of the removal process. This includes:
- Notice of Meeting
- Meeting Minutes
- Extract of the Resolution
- Registered Post Slips (proof of notices sent to shareholders and the concerned director)
What’s is Form 20
Form 20 in Sri Lanka is a crucial document that companies must submit to the Registrar of Companies within 20 days when they appoint, remove, or make changes to the details of a director or secretary This form, officially known as the “Notice of Change of Director/Secretary and Particulars of Director/Secretary,” ensures proper documentation of these important personnel changes.
Seeking Professional Guidance
Navigating director removal can be complex. At ASAC, we offer expert advice, timelines, and legal support tailored to your specific circumstances. Feel free to reach out to us for further details.
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