However a special notice of the intention to propose

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However, a special notice of the intention to propose the resolution is required and the director concerned must be notified of the intention to remove him – s. 168 CA 2006. A director proposed for removal is entitled to defend himself before the members at the general meeting before the resolution to remove him could be passed – s. 169 CA 2006. Because of this, a director cannot be removed by written resolution. Note that a company may not follow this procedure if its articles provide for the removal of its directors in other ways (s. 168 (5) CA 2006). A director removed before the end of his contract may be entitled to damages for breach of contract if he has a contract. 24.8 DISQUALIFICATION OF DIRECTORS Under the s. 280 CA 2006, a director may be disqualified from acting as such following a number of events, including when he: • becomes bankrupt or makes arrangement or composition with his creditors, • becomes of unsound mind, fails to attend board meetings for six consecutive months without permission – (See Model articles), or acts as a secretary at the same time in the same company (if the company is a plc). Under the Company Directors’ Disqualification Act (CDDA) 1986 , a court could order the disqualification of a person as a director. The order of disqualification may be mandatory or discretionary. A court is under an obligation to order the disqualification of a person as director for between 2 and15 years if he has been a director of an insolvent company and his conduct in that company makes him unfit to be a director. In deciding whether the person has been unfit, the court considers, among other things: • Whether he has been involved in any misfeasance or breach of duty as a director; Whether he has been involved in any misappropriation of company’s money or property; • Whether he had failed to comply with accounting and publicity requirements of companies legislations; The extent of the person’s responsibility in the insolvency of the previous company, and, • The extent of the person’s responsibility in the other company’s failure to supply any goods or services already paid for – (See s. 9 and Schedule 1 of the Act). Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY COMPANY DIRECTORS 432 The court is also under an obligation to disqualify a person as a director if he breaches the United Kingdom or European Union competition laws by distorting or restricting competition; or by abusing a company’s dominant position , and his conduct makes him unfit to be involved in the management of a company – s. 9 CDDA 1986. Under sections 2, 3, 4, 10 CDDA 1986, the court may on its discretion disqualify a person as a director for between five to fifteen years: • if he has been convicted of an indictable offence connected with the management of a company, or • if he has been persistently in default of the provisions of company legislation, or • if he has been found guilty of fraudulent or wrongful trading.
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