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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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Is it lawful to suspend a director of a non profit company

Customer Question

Is it lawful to suspend a director of a non profit company limited by guarantee in scotland under the company act for conflict of interest by the board of directors?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Have you just been suspended full stop? or excluded from voting on the subject matter causing the conflict?

Kind regards

AJ
Customer: replied 2 years ago.

This about a director we as the board intends to suspend due to conflict of interest and behaviour that could be deemed as detrimental to the interest of the organisation. He is aware of the move to suspend him

Expert:  Alex J. replied 2 years ago.
Hi

Thank you can only be removed one of the following ways:

1. Through a member resolution (ordinary) under s168 of the Companies Act 2006;
2. If there is a specific resolution in the articles allowing removal by the board.

Normally if there is a conflict of interest the director won't be allowed to vote on the business at hand unless there is a provision in the articles. Failure to declare the interest is a criminal offence under s183 of the CA Act.

However just to suspend the director is not an option however on the basis that he has committed an offence it would obviously be acceptable to exclude him from meetings while the company decides what actions to take.

Can I be of any further assistance?

Kind regards
AJ

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