Remove a director legally and protect your company. Discover the correct steps, avoid pitfalls, and ensure compliance.

How to Remove a Director from a Limited Company: Legal Steps and Pitfalls

Dinah Jantasz November 6, 2025

Removing a director from a limited company is a significant decision that must be handled carefully to ensure it is legally valid and does not create future risks for the business or its shareholders. Whether due to misconduct, poor performance or a breakdown in working relationships, it is essential to follow the correct procedures under company law.

In this article, we outline the legal steps for removing a director, highlight common pitfalls, and explain how to protect your company during the process.

Can a Director Be Removed?

Yes, a director can be removed from a limited company in the UK. There are several routes through which this can happen:

The director may resign voluntarily;
Shareholders can remove the director by passing an ordinary resolution under section 168 of the Companies Act 2006 (“Companies Act”);
The company’s articles of association or a shareholders’ agreement may set out additional procedures or grounds for removal;
A director may also be disqualified by a court or regulatory authority in certain serious cases.

The most commonly used process, and the one this article focuses on, is statutory removal by shareholder resolution pursuant to the Companies Act.

Step-by-Step Guide to Removing a Director by Shareholder Resolution

Check the Articles of Association and Shareholders’ Agreement

Before taking any action, review your company’s articles of association and any shareholders’ agreement. These documents may:

Contain bespoke provisions about how directors can be removed;
Require enhanced shareholder approval;
Provide contractual rights that protect the director from removal (e.g., veto rights).

Failing to follow these could amount to a breach of contract, giving the director grounds to bring a claim.

Call a General Meeting of Shareholders

Under Section 168 of the Companies Act, shareholders can remove a director by passing an ordinary resolution (i.e., a simple majority of votes).

To do this:

Give special notice of the resolution (at least 28 clear days before the meeting);
The company must then send a copy of the notice to the director;
The director has the right to make written representations and speak at the meeting.

Hold the Shareholders’ Meeting and Vote

At the general meeting:

Shareholders vote on the resolution to remove the director;
If more than 50% of the votes are in favour, the resolution is passed;
The company must then file a form TM01 at Companies House within 14 days of the director’s removal.

Update Statutory Records

Once the resolution has passed and the form TM01 is filed:

Update the company’s register of directors;
Notify any other stakeholders or regulators (if applicable).

Common Pitfalls to Avoid

Not Following the Notice Requirements

Special notice must be given to both the company and the director. Failure to do so may render the removal invalid.

Ignoring the Shareholders’ Agreement

If there’s a shareholders’ agreement in place (especially in owner-managed businesses), removing a director without following its terms may lead to a breach of contract or even an unfair prejudice petition.

Employment Law Overlooked

If the director is also an employee, their employment rights (e.g., notice periods, unfair dismissal protection) must be considered separately. Removal from the board does not automatically terminate employment.

Risk of Unfair Prejudice Claims

Minority shareholders who are removed as directors may claim they’ve been unfairly treated under Section 994 of the Companies Act, particularly in quasi-partnership companies.

Alternative Options

In some cases, it may be more appropriate (and less contentious) to:

Negotiate a mutual exit with the director;
Offer a settlement agreement;
Restructure the board in accordance with agreed business terms (particularly where specific provisions around board members are outlined in a shareholders’ agreement).

How We Can Help

At The Jonathan Lea Network, we regularly advise companies and shareholders on how to remove directors lawfully and with minimal disruption. We can:

Review your company’s constitutional documents;
Advise on employment law risks;
Draft notices, resolutions and settlement agreements;
Handle filings and compliance steps.

Removing a director can be a sensitive and complex process. If handled poorly, it can result in costly disputes and reputational damage. Our experienced team is here to guide you through each step and ensure the process is fair, lawful and in your company’s best interests.

We usually offer a no-cost, no-obligation 20-minute introductory call as a starting point or, in some cases, if you would just like some initial advice and guidance, we will instead offer a one-hour fixed fee appointment (charged from £250 plus VAT to £350 plus VAT* depending on the complexity of the issues and seniority of the fee earner).

Please email wewillhelp@jonathanlea.net providing us with any relevant information ensuring that any call we have is as productive as possible or call us on 01444 708640. After this call, we can then email you a scope of work, fee estimate (or fixed fee quote if possible), and confirmation of any other points or information mentioned on the call.

VAT is charged at 20%.

This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.