Removing director without her knowledge - Help

[URBAN COLOUR]

Hi, I have read a thread which is a little too old to reply to so I have to start a new one

My friend has had problems with the managing director of the tenants association of which she is a director and a leaseholder. The managing director is the freeholder.

I have searched companies house today and paid for a notice (Form TM01) which says my friend resigned in 2011. She has no idea of this and has never agreed or been contacted about this.

The first thing that springs to mind is it may be the freeholder playing games and if so this maybe a case of fraud. How do I go about finding out what has gone on here and what steps can be taken? Would the managing director an other directors have received notification from companies house at all?

Thanks

 

[Chris Ashdown]

For her to be dismissed as a Director there would have had to been a board meeting with a letter to each director telling them of the meeting and reason and for the meeting. She would have been able to cast her vote to remain a director and a vote made by the board

 

[thelegalstop]

Did she have any directors services contract? If so, a termination clause should have been included

 

[URBAN COLOUR]

Thanks to both of you

Chris, the first she knew about this is when we did a companies house search relating to another matter. Its a shock to her.

Legal Stop, Im not sure if she had such a contract but I will ask and check the clause. I assume, perhaps wrongly that even if there is such a clause she should not have been removed without some kind of due process.

Also the application was submitted to companies house online and it states that she resigned. Does this make a difference at all?

 

[Chris Ashdown]

The first thing to do is to challenge the Managing Director, state that you see you have been removed as a Director at companies house: and dispute this.

You require him to provide you with proof of the meeting where you were dismissed and would need to see the minutes of the meeting, also proof that you were sent details about the meeting when and where it was taking place.

You can also state that you have never resigned and if not reinstated immediately will report the matter as fraud

 

[URBAN COLOUR]

Thanks again Chris

 

[Merchant UK]

I agree with Chris 100%. Companies house take Fraud very seriously. yesterday when i completed my Annual Return i signed up to their Anti Fraud proof scheme.

PROOF helps prevent...
attempts to change your registered office address or directors of your company without your knowledge.

PROOF ensures...
changes to your company record are only made online and paper filings of the following are rejected:

Registered office address
Officer e.g. director appointments, terminations or changes
Annual return

I would recommend that you try and get the company to reinstate you and sign up to Companies House proof Scheme.

Tell them that you will report them for Fraud if they do not reverse what they did without your knowledge.

Take a peek here http://www.companieshouse.gov.uk/webfiling/demoVideos/PROOF.shtml

 

[URBAN COLOUR]

Thanks all again

I started another thread in the forum here

http://www.ukbusinessforums.co.uk/forum/showthread.php?p=2265941#post2265941

And it seems a director can be 'resigned' for not attending meetings and Table A of the Companies act states

Disqualification and Removal of Directors

81 (e) he shall for more than six consecutive months have been absent without permission of the directors from meetings of directors held during that period and the directors resolve that his office be vacated.

I'm not sure if this is the case yet but the other reasons do not apply. However, If this is the case, would my friend not have to be notified of any action to remove her so she may defend herself? I cant seem to find anything to say notification should or not have been given to a director being removed?

 

[Merchant UK]

Well i'm sure they would of made some reasonable effort to contact your friend to let them know. The fact that they did nothing and didn't even mention that they would be dismissed unless they turned up for a meeting is pretty shabby.

For arguments sake did your friend know of any meetings which she could of gone to, do they have regular meetings, ie once a month?? did any of the other directors contact her?

Why did she keep way for so long?? did she let them know?

 

[URBAN COLOUR]

I am just chatting to her online now, She lives in Malaysia and has done since 2009. She tells me that the MD was aware of this as he was in contact with both the tenant (who rented my friends flat) and of the managing agent.

She had attended all meetings prior to her move

 

[Chris Ashdown]

In that case it seems impossible for her to undertake the duties of a Director if she is unable to attend the board meetings, there are legal duties in being a director and i would guess she is failing in some of them

 

[URBAN COLOUR]

In that case it seems impossible for her to undertake the duties of a Director if she is unable to attend the board meetings, there are legal duties in being a director and i would guess she is failing in some of them

What about by proxy?

 

[Merchant UK]

What about by proxy?

That would depend if its allowed by the other directors. If she's living aboard, why does she still want the directorship even if she has no means to fulfill her obligations. You may be able to vote by proxy but not undertake directorship obligations by proxy.

The reasons they state that if no directors have an active involvement within the 6 month period they would vacate their role is because they want the Directors to have an active part in the decision making and to be available to deal with any issues which may arise.

your friend being abroad had no involvement for over 6 months, proxy or not so she's been removed and looking at it from what you've said, the managing Director has only gone by the rules which where agreed by all who take up the post of Director.

How can she take an active involvement when she's the other side of the world? and why would she want to??

 

[URBAN COLOUR]

I understand what you mean. I think if this situation had been handled in another way (less underhanded) then it wouldn't actually have seemed so bad. And my friend, being reasonable would probably have agreed to the removal.

This removal as director has been played by an MD who has a history of being 'less than reasonable' and there are other outstanding issues that are yet to be resolved regarding the leases.

Thanks again for your help

 

[Merchant UK]

This removal as director has been played by an MD who has a history of being 'less than reasonable' and there are other outstanding issues that are yet to be resolved regarding the leases.

Thanks again for your help

No worries but the MD here is not unreasonable but just following the rules, had she made an effort to turn up for the meetings or make other arrangements then i'm sure they would be accommodating, but leaving the country and not making contact, well thats not really their fault.

Does your friend benefit in any way at being a director then??

 

[URBAN COLOUR]

Im not sure she benefits in anyway by being a director but I would have to ask. Thanks again

 

[The Resolver]

Being removed from the record at Companies House does not remove her from the Board. If the rules have not been followed then the MD has misrepresented the position to CH . They have a rectification service.

The PROOF system is of no relevance here as an authorized registrant notified CH of her 'removal'. PROOF can't prevent that happening.

Being out of the country is also no reason to remove her since board meetings are legally permitted to take place online.

Being out of the country is only of relevance to any employment taken on for the company.

Removal can only be by letter of resignation or vote of the shareholders ( not the Board) in AGM/EGM after a 28day notice setting out the grounds.

 

[The Resolver]

Being removed from the record at Companies House does not remove her from the Board. If the rules have not been followed then the MD has misrepresented the position to CH . They have a rectification service.

The PROOF system is of no relevance here as an authorized registrant notified CH of her 'removal'. PROOF can't prevent that happening.

Being out of the country is also no reason to remove her since board meetings are legally permitted to take place online.

Being out of the country is only of relevance to any employment taken on for the company.

Removal can only be by letter of resignation or vote of the shareholders ( not the Board) in AGM/EGM after a 28day notice setting out the grounds.

She should begin to act like a director and call for meetings and request information and file Resolutions.

 

[URBAN COLOUR]

Thanks Resolver,

Something more to consider

I think whatever the reasons for the retirement of my friend someone should be made accountable. The problem is, with limited knowledge there is no one definitive answer and with my experiences over the years of solicitors, as in any profession, there are good and bad.

My friend lives out of the UK for most of the time now and here directorship wasn't attached to any particular job or role and so perhaps other there were other methods such as online for her to be involved.

You mention the 28 days notice which should have been served setting out the grounds. No such notice was ever served and so it would seem to me that the required steps had not bee followed.

Its time to put a plan of action together !!

 

[Chris Ashdown]

The letter would probably have gone to her known residence which was most likely her uk residence and may not have been forwarded on

I imagine it would be up to the directors to change their policy to allow online board meetings and having the facility to do so, unless they have something like video set up then it would seem rather a waste of money and not in the companies interest

 

[URBAN COLOUR]

Thanks Chris

The point here is that the MD had both UK address (he knew it was let) and all directors own flats in the same building which is why there is a company in the first place. On top of this, the MD was aware of and had contact information for the managing agent who was acting on behalf of my friend so mail could have been delivered and not lost.

I take the point about the online voting, however, The issue here is that my friend was resigned without any steps being taken to inform her or any attempt to seek alternatives such as online voting.

This has all been done on the quiet (in keeping with the MD's controlling nature) and it is a matter of principle.

 

[Chris Ashdown]

Yes but the principle is that she has not made any effort in years to undertake the directors duties and would if it had continued probably stopped another resident who would have been far more active and interested in taking over the role

How would you feel about a Director, if you owned one of the flats and who never attended meetings and also never cared about what was happening to look after your interests. She would not have questioned any service charges or other costs, changed service providers for better ones if required etc, instead she just played dumb and let the others do what they wanted. She basically said let the MD controll the company and I will Bleat about it when it's to late

The residents can always vote the MD Out

 

[The Resolver]

The issue is not whether it would be right to remove her but whether she has been removed. From what we have been told she may well still be a director in which case steps can be taken to rectify the Register.

Of course this may delay the inevitable but at least would mean information must in the interim be given to her and she can appoint an alternate director to attend meetings (I have taken on that role for clients).

If she wants any practical help then by all means pass on my details.

 

[URBAN COLOUR]

Sorry I thought I had mentioned earlier. My friend has been removed as director by virtue of a form TM01 submitted to Companies House in 2011. The form actually states she resigned but I dont know if resigned can mean 'resigned by the other directors'

I sent an email to CH and they confirmed the online submission would have had to be done by the person with the log in details (kind of obvious) and they suggested talking to the company and seeking legal advice.

 

[The Resolver]

Makes no difference. If she did not resign ( signed a written notice of resignation) then she is still a director and all that has happened is that whoever filled in the form has misled CH.

 

[URBAN COLOUR]

Resolver, Can I PM you probably tomorrow now ?

 

[URBAN COLOUR]

Upon reading the articles of association, under Sec 379 of the Companies Act, 1985, my friend should not have been removed from directorship without the issue of a 28 day notice.

Im thinking that as this didn't happen or wasn't received then the the removal should be reversed.

Copy of the act on Google here is anyone ever needs a little help

http://books.google.co.uk/books?id=...with section 379 of the companies act&f=false

 

[Chris Ashdown]

Has she made the effort to contact the MD or Charman to find out what's happened and why directly her self, after all with no disrespect no Director would want to talk to a third party about another Director, and there is always the data protection act that may apply depending whats asked

Therefore it's rather unfair to ask you to delve into her affairs

 

[URBAN COLOUR]

I agree Chris, but the MD has a history of playing unfair and getting his own way because people arn't sure how they stand.

My role here is simply to help find out the information and assist. My friend will be making all contact and attempting to resolve

 

[Merchant UK]

I agree Chris, but the MD has a history of playing unfair and getting his own way because people arn't sure how they stand.

My role here is simply to help find out the information and assist. My friend will be making all contact and attempting to resolve

You keep saying the MD has a history of playing Unfair but its specially states that unless a director attends the meetings and makes an effort then their position will be vacated.

It appears that your friend made no effort to contact anyone or even turn up to the meetings and now shes living aboard why does she feel the need to bring all this up when she doesn't live up to her Director Obligations.

You said yourself that now shes aboard the directorship means nothing to her, so what's the problem? accept the fact that its over and move on. You can't say that the MD has a history of playing about, when your friend had no intention of ever fulfilling her obligations.

Its nothing personal, its just from what i read here, what does she hope to achieve?

 

[URBAN COLOUR]

I understand your point merchant and my friend would have been happy to leave the directorship. However, when I say the MD has a history of being unfair, I talk about other aspects that are not discussed here and which are in hand at the moment. The removal of my friend as director in a way that isn't in keeping with legislation is a case of the straw the broke the camels back and may aid in the bigger picture.

I also stress that every opportunity has been made to resolve these other matters in an amicable way and over a generous period of time and the lack of willingness on behalf of the director is what lead to the removal of director being noticed.