Question

What are ways in which directors are appointed and can be removed from office?

Answer 1

Well, DIRECTORS can be appointed in different ways.

1. A companies share holders can appoint a director, that is shareholders has the right to elect directors probably by voting and elect the director in a general meeting

2. A letter of appointment (LOA) is used to select a non executive director. This is commonly done in uk based companies. In an LOA, it clearly states about the terms and conditions between the director and company includes the duties, status, time duration etc.

3. A Type of contract of employement appointment , a type of service agreement, is used to elect executive directors. In this contract it includes emplyment status etc.

Appointment of directors should be mandatorliy informed with companies house.

REMOVING a director:

1. Shareholders also has the right to remove a director from the position by following the legalities

2. LOA clearly specifies about the removal of a non executive director. Depends upon the companies policies

3. In a service agreement, clearly specifies about the terms and conditions to how to remove a existing director.

If a company plans to pay a remuneration to the removed director, then shareholders should approve the remuneration amount. Removal of director should also reported in the company house