Appointment and removal of directors
Directors of a company are the people entrusted with the day to day running of a company. Therefore, how they get to the position and the process of their removal matters. Directors get to the position either as first directors (in the course of incorporation) or as a subsequent director (after incorporation).
The first directors are usually appointed by the subscribers to the memorandum and article of association of a company. They are usually named in the memorandum and article of association of the companySection 247 of CAMA.
Under Section 248 of CAMA, appointment and removal of subsequent directors is within the power of the shareholders of a company. The power is usually exercised at the annual general meeting. However, by virtue of section 249 of CAMA, directors can appoint a director to fill casual vacancy (maybe as a result of death of a director). The appointment is still subject to the approval of the shareholders at the next annual general meeting.
As for the removal of a director, the procedure is in section 262 of CAMA. It must be noted that ordinary or simple resolution is all that is needed to successfully remove a director. The procedure as stated under section 262 is broken down below
1. A special notice shall be required of any resolution to remove a director under this section, or to appoint some other person instead of a director so removed.
2. The company shall forthwith send a copy of the notice to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.
3. A notice of a general meeting at least 21 days before the date of meeting to all members of the company. This notice will be accompanied by the representation if any made by the director concerned.
4. The company must give audience to the director concerned and read his representation (if any) at the meeting to members in the meeting in case same was not delivered to all the members at the meeting.
5. To remove the director, an ordinary resolution is passed by a simple majority of votes cast at the general meeting
6. The company is to notify CAC of this removal by filing Form CAC 7A.this must be done within 14 days of the removal. Late filing fee will be charged if it was not done within 14 days.