Is it Possible to Change a Director?
Companies have a complex manner and procedure of working. With many things to do and many functions to perform, a director is one of the most important parts of the company. Managing the day to day work of the company as well taking care of the bigger picture is the primary role of a director.
However, for various reasons, a director may become dysfunctional or may not add something spectacular to the company. In such cases, the company and its members can decide to change their director or directors.
Is there a Specific Procedure to be Followed to Change a Director?
Yes, there is a specific route to be taken when a company or its shareholders or the company’s members decide to change a director. Without following the specific route for such as change, the director will have proof that an unjust action was taken against the director, thereby causing harm to the company’s image and goodwill.
Why would you need to Change a Director?
There are a number of reasons why a company or its members choose to remove and change a director.
Here are some of them:
- The services are no longer required by the company,
- Or the director is incapable of providing the service company needs.
Apart from this, the reasons for a company choosing to remove and change a director can be many. However, the point to be remembered during this is that such removal of directors or change should not conflict with what is written in the AOA of the company or with the rules and regulations offered by the Companies Act 2006.
What is the Procedure of Changing a Director?
While it is an easy thing to say, the actual change of a director is quite extensive of a procedure. First, the company will need to remove the previous director or directors, if they wish to change them.
In such a case, the removal of directors should be made as per the Companies Act 2006. Additionally, the decision should be passed in an ordinary general meeting with 55% of the voting share present at the meeting or more. The Company House should also be notified of this change.
The change of directors for a company takes place once the existing or older directors have been removed from their office or have vacated their office.
How does a Company Change its Directors?
Changing a director of any company is an intricate process. Here is how it is done:
Change the details of a Director – Form (CH01)
Also, it must be noted that if the Company House is notified through post of the change in directors, it will take about 6-7 days for the house to process your request. Apart from this, if you choose to file the notification online, you will be get a confirmation within 24 hours.
Is it Necessary to Inform the Company House of such Changes?
Yes, it is absolutely necessary for you to notify the company house of changes in your board of directors. As per the rules of Companies Act 2006, every change in the details of your company’s board needs to be filed with the Company House. Furthermore, there are specific number of days within which the notification has to be send to the company.
In case of any discrepancy with the rules and regulations as specified by the Companies Act 2006, the shareholders, the members and the company may attract fines and other legal ramifications.