Removing a Director: A Complete UK Guide

Removing a director from a UK limited company is more involved than simply deleting their name from Companies House. A director may leave voluntarily, be removed by shareholders, or cease to hold office for another legal reason. Each route has different implications for the company, the individual, employment arrangements, shareholder rights and Companies House filings.

For founders and shareholders, the key distinction is this: removing someone as a director does not necessarily terminate their employment, ownership of shares or other contractual rights. This guide explains how director removal works under UK company law, when shareholder approval is required, what Companies House must be told, and what to do if the director refuses to cooperate.

What Does Removing a Director Mean?

Removing a director means bringing their legal appointment as a director to an end. A director is an officer responsible for helping manage the company and comply with duties under the Companies Act 2006. Their name and relevant details are recorded at Companies House. There are several ways a directorship can end, including:

• Voluntary resignation by the director
• Removal by shareholders
• Removal under the company's articles of association
• Disqualification or other legal restrictions
• Death of the director
• Circumstances specified in the company's constitution or an agreement

The correct process depends on why the director is leaving and how the departure is being achieved. Companies House provides a specific TM01 process for notifying the registrar when a director's appointment ends.

Can Shareholders Remove a Director?

Yes. In many cases, shareholders can remove a director before the end of their appointment by passing an ordinary resolution. Section 168 of the Companies Act 2006 provides a statutory mechanism for removing a director by ordinary resolution at a meeting. The legislation also requires special notice for such a resolution. This is important because a director cannot ordinarily be removed simply because another director wants them gone.

The company's shareholders and articles of association matter. For example, imagine a company has three shareholders:

• Founder A owns 60%
• Founder B owns 25%
• Investor C owns 15%

If the statutory removal procedure applies and the required voting threshold is achieved, Founder A may have enough voting power to secure an ordinary resolution. But the company's articles, shareholders' agreement, service contracts and other arrangements should still be reviewed before action is taken. Companies House itself notes that removing a director generally requires shareholder approval through a resolution.

What is an ordinary resolution?

An ordinary resolution normally requires more than 50% of the votes cast by eligible shareholders. This is different from a special resolution, which generally requires at least 75%. The voting position should be assessed using the company's actual share and voting rights rather than simply counting the number of shareholders.

Removing a Director vs Asking Them to Resign

These are not the same thing.

Voluntary resignation

A director can decide to resign. The company then records the effective date and notifies Companies House.

Shareholder removal

If the director does not agree to leave, shareholders may be able to use the statutory removal procedure. This distinction becomes particularly important in founder disputes.

Suppose two co-founders own 50% each. One founder wants the other removed, but the other refuses to resign. The first founder cannot simply submit a TM01 and treat the director as removed. The underlying legal process must support the termination. TM01 is a notification of a termination that has already occurred; it is not a substitute for obtaining the legal authority to remove the director.

How to Remove a Director: Step-by-Step

The process can be divided into six practical stages.

1. Check the company's articles and agreements

Start with the company's articles of association. Also review any:

• Shareholders' agreement
• Investment agreement
• Director service agreement
• Employment contract
• Founder agreement
• Relevant board or shareholder resolutions

These documents may contain provisions dealing with appointment, removal, voting rights, compulsory transfer of shares, conflicts and termination. The statutory procedure should not be considered in isolation.

2. Establish why the director is being removed

The reason can affect the appropriate approach. For example, the situation could involve:

• Poor performance
• A breakdown between co-founders
• Misconduct
• Conflicts of interest
• Breach of fiduciary duties
• A strategic disagreement
• Retirement
• A shareholder dispute
• Loss of confidence
• An agreed restructuring

A straightforward commercial departure is very different from an allegation of fraud or serious misconduct. Where the situation is contentious, professional legal advice can be worthwhile before any shareholder notice is issued.

3. Follow the correct shareholder procedure

Where removal is being pursued under section 168 of the Companies Act 2006, special notice is required. The director must also be given the opportunity to make representations regarding the proposed removal. Section 169 provides that the director is entitled to be heard at the meeting considering the resolution. This is one reason why a company should not treat director removal as a simple administrative filing.

4. Hold the required meeting or decision process

The company must follow the applicable rules for calling and conducting the meeting. The company's articles and the Companies Act should be checked carefully, particularly regarding:

• Notice periods
• Who is entitled to vote
• Quorum
• Voting rights
• Proxies
• Conflicts of interest
• Meeting procedures

A procedural mistake can create unnecessary disputes about whether the removal was valid.

5. Record the decision properly

Keep appropriate corporate records showing what happened. Depending on the circumstances, this may include:

• Notice of the proposed resolution
• Shareholder resolution
• Meeting minutes
• Evidence of voting
• Director representations
• Updated statutory registers
• Relevant board records

Good records matter particularly when the company has multiple shareholders or expects future investment, due diligence or a sale.

6. Notify Companies House

Once the director has ceased to hold office, the company must notify the registrar. Under section 167 of the Companies Act 2006, a company must notify Companies House within 14 days when someone becomes or ceases to be a director, or when relevant particulars in the register change. For a director whose appointment has ended, the company generally uses form TM01. Companies House recommends online filing because it is quicker to process than paper submissions.

What Information Is Needed for a TM01?

The TM01 filing is used to notify Companies House that an individual or corporate director's appointment has ended. The filing records the termination and the date on which it occurred. Companies House's current filing guidance lists TM01 as the form for terminating a director's appointment.

The most important point is to make sure the information matches the company's records. An incorrect termination date, incorrect director details or inconsistent corporate records can create problems later.

What Happens After the Director Is Removed?

Removing the director from office does not necessarily end everything connected with that person. This is where many small businesses make mistakes.

Their shares do not automatically disappear

A director can also be a shareholder, but being a director and being a shareholder are legally different positions. If a director owns 30% of the company, removing them as director does not automatically transfer or cancel their 30% shareholding. The shares may need to be dealt with separately under the company's articles, shareholders' agreement or another legally valid arrangement.

Their employment may continue

A director may also be an employee. Removing someone from the board does not automatically resolve their employment relationship. The company should therefore examine any employment or service agreement and consider whether notice, compensation, redundancy or other contractual issues arise.

The Companies Act itself preserves the possibility of compensation or damages following removal, depending on the relevant agreement and circumstances. HMRC guidance also recognises that payments made under employment contracts can have tax consequences, so remuneration and termination payments should be handled carefully.

Their historical responsibilities do not simply disappear

Leaving the board does not erase what happened while the person was a director. For example, a former director could still face questions concerning conduct during their period of office. In serious cases involving insolvency or misconduct, directors can face investigation or disqualification.

Can You Remove a Director Without Their Consent?

Potentially, yes. A director's consent is not necessarily required for statutory removal by shareholders. However, that does not mean shareholders can ignore the prescribed procedure. The director has statutory rights in relation to a removal resolution, including the right to make representations and be heard at the meeting.

This is an important distinction: Consent may not be required, but due process still matters. If the company has a complicated ownership structure, investor protections or a serious dispute, legal advice should be obtained before attempting the removal.

What If the Director Refuses to Cooperate?

A director's refusal to sign a resignation letter does not necessarily prevent shareholders from pursuing a valid removal procedure. The first question is whether the director is actually resigning or whether the company intends to remove them. If the director has already validly resigned, the company can notify Companies House of the termination. If the director refuses to resign, shareholders may need to consider the statutory removal procedure and the company's constitutional documents.

Do not attempt to solve the problem by submitting inaccurate information to Companies House. Companies House has increased its focus on the accuracy of corporate information. Directors are legally responsible for ensuring information provided to the registrar is accurate and complete.

What If Removing the Director Leaves the Company With No Directors?

This can be a serious practical problem. A UK limited company generally needs at least one director. If removing one director leaves the company without any directors, the company needs to address the vacancy. For example, a company with two directors cannot simply remove both and continue operating normally without considering who will manage the company.

GOV.UK specifically notes that if a company does not have a director, a new director needs to be appointed. The safest approach is often to coordinate the departure and replacement appointment so that the company is not left without effective management.

What About the Company's PSC?

Removing a director does not automatically mean the person's People with Significant Control (PSC) status ends. A person can be:

• A director but not a PSC
• A PSC but not a director
• Both a director and a PSC

For example, a founder may step down as director but continue to own 60% of the shares. They may therefore remain a PSC. The company's PSC information should be reviewed separately after a director change. This is particularly important under the Companies House identity verification reforms introduced from November 2025. Companies and individuals now have additional identity-verification obligations as the new regime is phased in.

Director Removal Checklist

Before completing the process, use this practical checklist:

Common Mistakes When Removing a Director

• Treating Companies House as the removal process: Submitting TM01 is not what gives shareholders the power to remove a director. The legal termination must first be valid.
• Forgetting the director may own shares: Directorship and share ownership are separate legal interests.
• Ignoring employment rights: A director may simultaneously be an employee, creating contractual obligations beyond their board position.
• Failing to check the articles: The company's articles can contain important provisions affecting how decisions are made.
• Filing the wrong date: The Companies House filing should reflect the actual date the appointment ended, not simply the date someone happened to complete the form.
• Removing a director without replacing them: A company should not accidentally create a management vacuum.

How IncorpUK Fits Into the Process

For international founders and small businesses, director changes can become surprisingly complicated when the shareholders, directors and company administrators are based in different countries.

IncorpUK, as a UK company formation and management platform for global founders, sits within this broader compliance landscape. The important principle is that administrative filings should follow the underlying legal and corporate decision, not replace it. Where a removal involves a shareholder dispute, allegations of misconduct, employment claims, substantial share ownership or insolvency concerns, specialist legal or professional advice may be appropriate.

Frequently Asked Questions

Can shareholders remove a director in the UK?

Yes. Section 168 of the Companies Act 2006 provides a statutory mechanism for removing a director by ordinary resolution at a meeting, subject to the required procedure and special notice.

Does a director have to agree to being removed?

Not necessarily. A director can potentially be removed through the statutory shareholder procedure without their consent. However, they have rights concerning the proposed resolution, including the opportunity to make representations and be heard at the meeting.

What Companies House form removes a director?

Form TM01 is used to notify Companies House that a director's appointment has been terminated.

How long do you have to tell Companies House that a director has left?

A company generally has 14 days from the date a person ceases to be a director to notify the registrar of the change.

Can a director be removed if they own shares?

Yes, potentially. However, removing someone as a director does not automatically remove their share ownership. Any transfer or restructuring of their shares needs to be dealt with separately.

Can a sole director be removed?

It may be possible, but the company must ensure that it continues to meet its legal requirements for having a director. If the removal would leave the company without a director, a replacement should be considered.

Does removing a director remove them as a PSC?

No. PSC status is separate from directorship. Someone who remains a shareholder or otherwise meets the PSC conditions may continue to be a PSC after leaving the board.

Can a removed director claim compensation?

Potentially. Removal from office does not necessarily eliminate contractual rights to compensation or damages. The Companies Act 2006 expressly preserves such rights in appropriate circumstances.

Can a company simply file TM01 if the director refuses to resign?

Not merely because the director refuses. TM01 is a notification of termination. If the director has not resigned, the company must have a valid legal basis for ending the appointment, such as a properly conducted shareholder removal process.

Conclusion

Removing a director from a UK company is both a corporate governance decision and a Companies House compliance matter. The simplest cases involve a director who voluntarily resigns. More difficult cases arise when shareholders want to remove a director who refuses to leave, particularly where the person also owns shares, has an employment contract or is involved in a founder dispute. The safest approach is to work through the process in order:

1. Check the company's articles and relevant agreements.
2. Establish whether the director is resigning or being removed.
3. Follow the correct shareholder procedure.
4. Respect the director's statutory rights.
5. Record the decision properly.
6. Notify Companies House using TM01 within 14 days.
7. Review the person's shareholding, employment status and PSC position separately.
8. Make sure the company remains properly managed after the departure.

The central lesson is simple: removing a director is not the same as removing a person from every relationship they have with the company. Treat the board position, shares, employment arrangements and Companies House records as separate issues, and the process becomes much easier to manage correctly.