For certain reasons, a company may wish to remove a director. Some of the reasons may be:
- Poor performance
- Breach of duties to the company
- Negative limelight on the individual
In a private company
According to the Companies Act, the removal of a company director is through an ordinary shareholder’s resolution. This is provided if there are no other provisions in the Company’s Constitution. The shareholders have to give the director 14 days written notice unless this requirement is agreed to be waived by 95 per cent of the votes. The shareholder’s resolution has to be passed by calling for a general meeting. The notice period of 14 days for the general meeting will apply.
In a public company
The removal of a company director will also be through an ordinary shareholder’s resolution. Again, there can be other provisions stated in the Company’s Constitution. To call for a general meeting to pass the resolution, a notice period of 28 days must be given.
The director is removed once the resolution has been passed and his successor has been appointed if he is the sole director. The removal process will be complete once the company updates the particulars of the new director and/ or removes the outgoing director with ACRA.
Please note that ACRA has charged company officers for not complying with the Companies Act and the Constitution of the Company when removing a director.
In July 2018, a director and shareholder at Tricon Resources was found guilty of filing false information on the removal of his co-director after a dispute. Based on the constitution of the company, an ordinary resolution needed to be passed. The offender was fined SGD$7,500.
In August 2018, a director at Food Partners Wang Rui falsely stated that a former director of the company had resigned. The director was fined SGD$9,200.
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Before filings with ACRA are done, it is important for directors and the individual who is doing the filing to ensure that proper documentation is done and proper consent and authorisation are obtained for the filings.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
Yours Sincerely,
The editorial team at Acra Filing Agent
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