There are three legal routes to remove a UK company director: voluntary resignation, removal by ordinary resolution under Companies Act 2006 section 168 (with 28-day special notice), or removal under powers in the articles or a shareholders’ agreement. Whichever route is used, Companies House must be notified within 14 days using Form TM01. Removal of a director-employee can also expose the company to employment tribunal claims unless handled correctly.
This guide covers each route, the section 168 procedure in detail, the Companies House filing, and the practical risks to manage.
The three routes
Voluntary resignation
The simplest route. The director gives notice in line with their service contract or letter of appointment, and the board accepts the resignation. File Form TM01 with Companies House within 14 days of the effective date.
If the director is also an employee, observe contractual notice. Termination payments and confidentiality on departure should be handled the same way as any senior departure.
Removal by ordinary resolution under section 168
Companies Act 2006 section 168 gives shareholders the right to remove a director by ordinary resolution (simple majority of votes cast), regardless of any contract or agreement to the contrary. This is the cleanest legal route where the director will not resign voluntarily.
Section 168 requires special procedural steps:
- Special notice to the company under section 312, given by the proposing shareholder at least 28 days before the meeting at which the resolution will be put.
- The company must immediately send a copy of the special notice to the director concerned.
- The director has the right under section 169 to make written representations to shareholders, and to be heard at the meeting.
- The resolution is put to an ordinary resolution of shareholders. A simple majority approves the removal.
The 28-day special notice cannot be waived even if all shareholders agree shorter notice for other purposes. This makes section 168 a slower route than other removal procedures.
Removal under articles or shareholders’ agreement
Many bespoke articles or shareholders’ agreements include their own director-removal provisions, often with shorter or more flexible procedures than section 168. Common examples:
- A founders’ shareholders’ agreement giving an investor right to remove a non-performing director
- Articles requiring removal upon insolvency, conviction, or specified misconduct
- Powers vested in the board to remove a director appointed by another shareholder
Where the articles or agreement provide a route, it can be used in parallel with section 168 — but the section 168 right cannot be excluded.
The section 168 procedure in detail
The full section 168 procedure for an ordinary resolution to remove a director:
- Special notice issued by a shareholder with the right to propose the resolution. The notice goes to the company, identifying the director and the proposed resolution.
- Company circulates the notice to the director immediately.
- Company gives shareholders notice of the meeting at which the resolution will be considered. Notice must be at least 14 clear days for a private company general meeting (or shorter notice can be agreed by 90% of voting rights, but this does not waive the 28-day section 312 special notice rule).
- Director’s right to representations. Under section 169, the director can require the company to circulate written representations to shareholders before the meeting, provided the representations are not unreasonably long. The director also has the right to attend the meeting and speak before the vote.
- Meeting and vote. The resolution is put to an ordinary resolution. Simple majority of votes cast carries it.
Watch for a Bushell v Faith clause. In Bushell v Faith [1970] AC 1099, the House of Lords upheld an articles provision that gave a director triple votes on a resolution to remove themselves, effectively blocking removal. Many modern bespoke articles still include similar weighted-voting protections. Check the articles before relying on a simple majority calculation.
Filing Form TM01
Once the director ceases to hold office (by resignation, removal, or expiry), the company must notify Companies House within 14 days using Form TM01.
Required information:
- Director’s full name
- Date of cessation
- Reason (resignation, removal, retirement)
File via WebFiling, the Companies House API through your accounting software, or by paper. Late filing risks penalties for the company and personal liability for officers in default. Filing TM01 alone does not by itself terminate the appointment — the legal removal is complete on the effective date, regardless of the filing.
Update the company’s register of directors at the same time.
For wider governance considerations including how to appoint the replacement, see how to add a director to a limited company.
After removal: practical items
The company must also handle:
Service contract and termination payments
Removing a director from the company role does not by itself end their employment. If the director is also an employee, terminate the employment separately and follow contractual notice. Failing to do so can lead to wrongful dismissal claims.
If removal is for cause (gross misconduct), termination without notice may be possible — but the bar is high and legal advice is strongly recommended.
D&O insurance run-off
Most Directors’ and Officers’ liability policies cover former directors for claims relating to acts during their term, but only while the policy is in force. If the company changes insurer or the policy lapses, run-off cover (typically six years) protects the former director against claims arising from their period in office.
Bank mandates and signatories
Update bank mandates to remove the former director as a signatory. Most banks require board minutes evidencing the removal.
Statutory book updates
Update the register of directors and the register of directors’ residential addresses. PSC review if the former director was a PSC.
Possible employment tribunal claim
If the director-employee believes the removal was unfair (in employment law terms — separate from the company law section 168 procedure), they may bring an unfair dismissal claim if they have over two years’ service, or a discrimination claim regardless of service. The fact that section 168 was correctly followed for the directorship does not protect against employment claims for the underlying employment role.
Forced removal: risks
Five risks to consider before forcing a removal:
- Unfair prejudice petitions. Under section 994 of Companies Act 2006, a minority shareholder removed in circumstances they consider unfair may petition the court for relief.
- Unfair dismissal. If the director is also an employee, the employment dimension is separate. Two-year service threshold typically applies for ordinary unfair dismissal, but discrimination claims have no qualifying period.
- Constructive dismissal. If the company conduct around removal amounts to a fundamental breach of contract, the employee can resign and claim constructive dismissal.
- Director loan account repayment. If the departing director has an overdrawn loan account, repayment becomes due. Forced repayment in financial distress can amount to wrongful trading risk.
- Breach of contract. Removing a director with a long service contract and inadequate notice can lead to substantial damages claims.
Take legal advice in any contested removal, particularly where the director is also a significant shareholder or employee.
Key takeaways
- Three routes: voluntary resignation, section 168 ordinary resolution (with 28-day special notice), or removal under articles or shareholders’ agreement
- Section 168 cannot be excluded by contract, but its 28-day special notice can be slow
- Director has a right to make representations and be heard at the meeting
- File Form TM01 with Companies House within 14 days
- Handle the employment dimension separately — section 168 covers directorship only
- Bushell v Faith clauses can defeat a simple majority — check the articles
Frequently asked questions
Can I just sack a director? No. Removing a director requires either resignation, a section 168 ordinary resolution with 28-day special notice, or use of an articles-based removal procedure. Even where the company controls the votes, the procedure must be followed.
What is special notice under section 312? A 28-day notice that a shareholder must give to the company before a section 168 removal resolution is put to a meeting. The company must then notify the director immediately.
Can a director block their own removal? Generally no, if the company has the votes for an ordinary resolution. But a Bushell v Faith clause in the articles (giving the director extra votes on a resolution to remove themselves) can effectively block removal, and is enforceable.
How long do I have to file Form TM01? 14 days from the effective date of removal. Late filing risks penalties for the company and the existing officers in default.
Does removing a director also end their employment? No. Removal from office terminates the directorship only. If the director is also an employee, the employment must be terminated separately, observing contractual notice and employment law procedure.
Useful resources
Companies House — File Form TM01 https://www.gov.uk/government/publications/terminate-an-appointment-of-a-director-or-secretary-tm01
Companies Act 2006 section 168 https://www.legislation.gov.uk/ukpga/2006/46/section/168
Acas — Dismissal procedure https://www.acas.org.uk/dismissals