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Submitted By:-
1) Jwalin Desai (09BAL010)

2) Shivang Jani (09BAL019)

3)Chintan Patel (09BAL039)

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 INTRODUCTION
Meaning of Director:-
A director, called an auxiliary predictor, is a
mechanical or electronic computer that continuously
calculates trigonometric firing solutions for use
against a moving target, and transmits targeting data
to direct the weapon firing crew.
A director is a body of elected or appointed members
who jointly oversee the activities of a company or
organization. The body sometimes has a different
name, such as board of trustees, board of governors,
board of managers, or executive board.
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HOW CAN DIRECTOR BE REMOVED
It may be that a dispute in the company leads to
either some of the directors or members wanting
to remove a director from office. A director may
have a service contract with the company
If the company terminates the director’s
appointment in breach of the contract, the
director may be entitled to damages.
It is by two way:-
1. Public Company
2. Private Company

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1. PUBLIC COMPANY:-
 Removal by other Directors-
 It is not possible for directors of a public company to
remove another director. This is prohibited by section
128(8).
 Removal by members-
 The members of a public company can remove a director by
giving special notice to the company to remove him,
(usually a simple majority) notwithstanding any provision
in the Articles.
 According to S.128(2) Special notice of the resolution to
remove a director is required that is not less than 28 days
notice to the company of the intended resolution.

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 According to S.153On receipt of the special notice of
resolution, the company must then give notice of the
resolution to its members at least 14 days before the
meeting. If the twenty-eight days grace period was not
complied with, the resolution shall not be effective.

According to S.128(3)and (4) Rights of director to be

heard also.

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2. PRIVATE COMPANY:-

 It is possible for the constitution of a private company to have a

provision that allows directors to remove another director.
 The provisions of section 128 do not apply to a private company.
 The removal of directors of private companies is governed by the
company’s articles of association.
 If there is no provision in the Articles pertaining to removal, the
directors can be removed by not being re-elected when he is due
to retire by rotation at the annual general meeting.
 The articles may permit the majority of members to remove a
director.
 However, it is possible for the articles to limit this in some ways.
 For example, the articles might specify that a director cannot be
removed by a majority of members for at least a year after taking
office.
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 DIFFERENCE
 In the case of a public company section 128 would
mean that even though this restriction is contained
in the company’s articles, the majority of members
could still remove the director at any time.

 However, in the case of a private company, the

restriction would have to be observed.

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ENTRECHMENT OF DIRECTORS
In Private Company:-

 Possible to ‘entrench’ directors by including suitably

drafted articles.

In Public Company:-

 Not possible to ‘entrench’ directors.

 S128(1)provides that a public company may always remove
a director by ordinary resolution, notwithstanding
anything contained in the company’s memorandum or
articles or in any agreement that may exist with the
director. NIRMA UNIVERSITY 8
 REMOVING OF DIRECTORS
There are two reasons where a company will remove a
director from office:

1. Where the director has resigned &

2. Where the shareholders or other directors wish to

remove the director from office

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1. Where the director has resigned
If a director wishes to resign from a company, they
must submit the form 288b to Companies House.
2. Where the shareholders or other directors wish
to remove the director from office
 Removal of a director must be conducted in
accordance with Section 303 of the Companies Act
1985.
 By S.303 of the Companies Act 1985 a company may
remove a director by ordinary resolution(by majority
of share holders).
 Once the Special Notice period (28 days) has
expired, the company must then send a copy of the
resolution to the director concerned.
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 AUTHORITY OF COMPANY
The company may

1. Disqualify Director

2. Terminate Director direct

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1. Disqualification of Director:-
 The courts have the power to make orders
disqualifying company directors. It applies not
just to persons who are formally appointed as
directors but to those who carry out the
functions of directors.
 Potential causes of disqualification include:-
Allowing the company to trade while insolvent
Not keeping proper accounting records
Failing to prepare and file accounts
Not sending returns to Companies House
Failing to send tax returns and pay tax

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2. Termination of Directors:-
 The Model articles, for example, provide that a person ceases
to be a director as soon as:-
 That person ceases to be a director by virtue of any
provision of the Companies Act 2006 or is prohibited
from being a director by law
 A bankruptcy order is made against that person
 A composition is made with that person's creditors
generally in satisfaction of that person's debts
 By reason of that person's mental health, a court makes
an order which wholly or partly prevents that person
from personally exercising any powers or rights which
that person would otherwise have
 Notification is received by the company from the director
that the director is resigning from office, and such
resignation has taken effect in accordance with its term.
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OTHER GROUNDS FOR TERMINATION
OF DIRECTOR
1. Dismiss summarily for gross misconduct
2. Serve notice and require director to work notice
period
3. Terminate instantly under express payment in
lieu provision
4. Lack Confidence

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 i re c to r’s
ag i n g D l
Man Is L aw fu
a t io n
Termin o t ? ? ?
or N

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 The Finnish Supreme Court has confirmed
that the board of directors of a limited
company are entitled to dismiss the
managing director of the company solely on
the basis of lack of confidence and without
any obligation to pay compensation, unless
the parties have agreed otherwise.

 CASE:-

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1. Background:-
 in this case the managing director had been managing
the company since September 1986. In July 1998 the
company's board of directors decided to dismiss the
managing director immediately, due to a lack of
confidence.
 There was no written contract between the parties in
which they would have agreed terms, such as length of
notice.
 The managing director considered the dismissal
groundless, and claimed damages and compensation
for a reasonable notice period.

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2. Legislation:-
 Under the established legal principle a company's
managing director is not an employee of a company.
3. Decision:-
Both the district court and the court of appeal held that
there was a tacit contract of service between the
company and the managing director. Therefore, the
company was obliged to pay compensation for a notice
period. The courts fixed the notice period at five months.
In contrast, the Supreme Court held that there are no
limitations in the Finnish legislation regarding the
termination of a managing director. Therefore, the
Supreme Court held that the termination of the
managing director on the basis of lack of confidence was
lawful. The managing director's action was dismissed.
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 CONCLUSION
Directors hold office at the behest of the
shareholders and at the end of the day, unless
there is a valid compensation agreement for
removal before expiry of a director’s term of office,
the director so removed may have little recourse in
law.

Courts are reluctant to interfere generally with

shareholders’ decision in removing directors if
proper procedure has been followed.
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 Board Of Directors Resolution Salary
Termination Of Officers Format
After it was moved, seconded, and discussed, the
__________________________, Pty Ltd. Board of Directors adopted the
following resolution:
RESOLVED that effective immediately the following officers of the Corporation
shall serve without any compensation whatsoever:
_____________________________, _______________________________,
_____________________________ and _______________________________.
IT IS FURTHER RESOLVED that this resolution overrides any previous
resolution concerning salaries of the aforementioned officers.
I, _____________________, certify that I am the duly appointed Secretary of the
_______________________ Corporation and that the above resolution was duly
adopted at a Board of Directors meeting, convened and held in accordance with
the laws of the State of ____________ and the bylaws of the corporation on
______________, 20____, and that such resolution is now in full force and effect.
IN WITNESS THEREOF, I certify by my hand and the seal of the
________________ Corporation that this is a true and correct copy.
________________________________________
Secretary NIRMA UNIVERSITY 20
SEAL:
 The End
Thank you

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