How are company directors appointed and removed?

When you’re managing a company it’s important to know how company directors are appointed and removed, in order to follow the necessary processes laid down by Companies House. The administration of directors is a legal matter that is carefully managed.

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When can a director be appointed?

At any point in the company’s history, a director can be appointed and then later resign or be removed. These actions must go through a formal approval process by existing directors or members, and these approvals must be made in line with the provisions of the Companies Act 2006. Other agreements, service contracts and articles of association will be relevant.

What does this mean for a directors personal guarantee?

If there is a directors personal guarantee in place, this will not automatically dissolve along with the directorship. The directors personal guarantee is handled separately and in line with the provisions of the lender. Liabilities against lending cannot be removed simply because a director leaves a company.

Changing director appointments

Once Companies House has been informed of the removal of a director, a formal process will occur to appoint a new director. The new director will sign a letter of consent. Most members need to approve the new appointment. When a new director is appointed, Companies House must be informed via the AP01 form within two weeks.

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The appointment and removal of a director is a highly managed process, and the paperwork must be completed carefully after due process is followed with the relevant directors and members. However, beyond the requirements of Companies House to regulate the process itself, businesses and organisations are at liberty to change their boards of directors as and when they need to in order to best manage their entities and to deliver their business plans.

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