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Jenny
Jenny, Solicitor
Category: Law
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Experience:  Qualified Solicitor specialising in Employment Law and general legal matters. Please start your question For Jenny Only
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I have a company law question, it revolves around the

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I have a company law question, it revolves around the s168/169 of the companies act. We removed a non-executive director who has no equity and the directorship was not tied to his employment contract in any way. We removed him from companies house the day before he was let go from the company. He was under 2 years and a fully comprehensive dismissal procedure was followed throughout the course of his dismissal which took place on the 26.10.18. Post dismissal we have had a letter from his lawyer stating that they still consider him to be a director of the company as the procedure in s168/169 of the companies act 2006 was not followed correctly. My question is do we need to reinstate him and follow the procedure outlined in the s168/169 or is there another form of documentation we can issue to ratify this decision?
Assistant: Have you discussed the employment contract issue with a manager or HR? Or with a lawyer?
Customer: we have discussed the HR process with a third party firm with which we are insured however the companies house process we have not had advice on at this point.
Assistant: What is your employment status? Are you an employee, freelancer, consultant or contractor? Do you belong to a union?
Customer: The person we let go was a full time employee for a period of 18 months and a non-exec director for around 4 weeks.
Assistant: Anything else you want the lawyer to know before I connect you?
Customer: Not sure what further information they require?

Hello my name is***** am a solicitor and I am happy to help you today. Do you mean should you reinstate him as an employee or as a director as I am not clear?

Customer: replied 7 days ago.
Apologies if not clear, we have dismissed him as an employee and we are confident in that process with no issues there. What I am seeking advice on is the process for removing non-exec directors who have no equity and the directorship is not tied to their employment contract in any way. Under s168/169 of the companies act 2006 they outline a process involving a resolution and notice. What is not clear is the timelines for this process and if we have removed him from companies house already do we now need to reinstate him and document the removal process more rigorously? Thanks in advance for your considered opinion.

That is a strange letter, have you responded to it yet?

Customer: replied 7 days ago.
very strange and confusing. we have responded on the employment claim and dealt with that aspect fully however we told them we are seeking advice on his removal as a director.

Ok a few questions:

1. Did his employment contract require him to resign directorship on termination of employment?

2. Who are the shareholders?

Customer: replied 7 days ago.
no problem:-
1. No, his employment contract did not enshrine any information regarding him being a director at any point. We added him at companies house about 6 weeks ago (with his consent) purely to aid administrative functionality and allow him to sign artists leases on the companies behalf after they had been ratified.There was never any discussion around any thing else that would be attached to this appointment.
2. Shareholders for Peckham levels - It is wholly owned by Makeshift Ltd which is 95% owned by the collective LLP and 5 % by ***** ***** Architects.

Ok thanks, ***** ***** life of me I cannot see why anyone would want to remain an executive director when they are no longer employed as they are potentially liable to the company's debts/ wrong doings!

The solicitors letter is a complete try on. There is nothing in the ACT that states that you must reinstate a director at companies house in order to follow the correct removal process nor is there any remedy to him personally for breach of 168/169. You can, of course, reinstate him if you wish I should imagine that this would put his solicitor in a rather awkward position as potentially this would put his client at risk and then follow the process of removing him. Perhaps it would be best to write this, as an option for them, or suggest he writes a resignation letter as an alternative.

For the future I would suggest that you amend employment contracts, to require director resignation, even if you appoint an executive director for a very short period.

Is there anything further you would like to know about this?

If I have answered your question I would be grateful if you would be so kind as to rate my answer. Thank you and all the best.

Jenny and other Law Specialists are ready to help you
Customer: replied 6 days ago.
This does indeed answer my question and thank you very much for your time. I will definitely rate your answer and use your service again if I have any future questions. Regards Nathan

No problem Nathan, all the best.