Directorship question!! UK only please.?

Question

We are based within the UK.

We are owned by a much larger austrian company.

We have a seperate board of directors - one being english and UK based and the other Austrian and austrian based.

However, of last week the austrian company that owns our company decided to withdraw the directorship of the austrian director. This was done without knowledge from either of the uk based and austrian based director of the uk company.

Is this legal? I thought that any decisions like that would have to be negotiated with the directors of the uk based company.


Any help is appreciated.

John.

Answer 1

Better check your M&A. A director can be removed by an ordinary resolution of the shareholders in a general meeting.

Shareholders also have statutory powers to call the meeting necessary to pass the resolution if the directors refuse to call it.

Often the shareholders have the power in the Articles of Association to remove a director at any time by notice to the company . I suspect your parent company are your shareholders and they are using this power.

The directors themselves do not commonly have the power to remove other directors from office (although they may dismiss directors as employees).

Answer 2

Any director can legally withdraw / resign from being a director at any one time. There is no need to consult or inform other directors, although obviously it would be better to do so. Providing the resigning director completees the relevant Companies House form then thats fine. Im not to sure if that form has to be countersigned by the company secretary.. that may be worht checking on the Companies House website.

There is a minimum number of directors who may be appointed (I think its two, a director and a company secretary).

Id be surprised if the parent company can boot off a director without a formal meeting of the board.. after all although the Austrian company owns the UK company, and therefore can do virtually whatever it wants it still has to go through certain legalities if the UK company is UK based. Usually these legalities are an AGM or EGM where shareholders may vote on any resolution put to them, or raised by them.

if there has been no board meeting terminating the directors appointment, nor any shareholder AGM or EGM resolution then it sounds fishy to me.

Answer 3

I think you will need to go back and check what you agreed when the company was originally set up. Without knowing all the ins and outs it's difficult to tell. As you say you are "owned" by the Austrian Company, thus if they "own" you I presume they can do what they like regardless. Often a director is in name only with no actual authority. Depends whether or not you have shares in the company. Only advice I can give is a) get in touch with Austria find out what's going on b) get a solicitor involved who specialises in company law, be expensive though or c) you could always try citizen's advice bureau which is free for a consultation as to where to go from here. Good luck. lottie

Answer 4

Directors are appointed by the shareholders and therefore it is the shareholders who can remove a director.

Generally, a director can only be removed by an ordinary resolution in a general meeting of the company. Check you Articles of Association to see if any special rules apply in your case.

If you are "owned" by the Austrian company then it seems that they hold more than 50% of the share capital. The holding of the meeting is purely academic since they have enough voting power to ensure the resolution is passed.

The proper procedure should still be followed, though.

Answer 5

Depends- if the company you work in is fully under its own ownership then i'd say no. If the company you work with is fully owned by the parent company then they can do whatever they want. In effect they are Directors of your company but they are still reasonably low down in terms of the Ultimate Parent company.

It does seem plain odd, if not rude, to not consult the Board that it is about to be changed though.

Answer 6

I am sure that someone at Companies House would be able to help you, check out their website, good luck

Answer 7

mmm Wasn't there some legal agreement. Check it.

Answer 8

anyone ever told you that you look good in suspenders?