Can Directors be Permanent?

Do compnay directors still need to be reappointed?

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Our Articles (CA 1985) state - in "Appointment and reirement of Directors"

"if the resolution or instrument by which a Director is appointed so provides, he shall be a Permanent Director and not subject to retirement by rotation; and articles 75 and 76 shall not apply to any permanent director"

Our very small property managment company has not ever appointed a director. The directors have become so by merit of being a shareholder, meaning some joint-shareholders cannot become a director.

The original self appointed director has said at a meeting that director rotation is not neccessary and that being a director is permanent until retirement, because of the clause quoted above.

Is he right? There is no recored of a "resolution or instrument" that accompanies any appoinment of directors in our company. Does that mean, in its absence such a resolution can or cannot be assumed?

 

 

Replies (6)

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By Wanderer
06th Jan 2024 11:04

You really are going down a rabbit hole of over reading the various documents, the law & considering technical points surrounding your residents property management company.

None of this will end well & WILL cost further £'000's in legal fees, not to mention the stress in dealing with this. Noted that there has already been a claim and a counter claim with solicitors and barristers involved.

I'd suggest all parties read a few books on mediation.

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RLI
By lionofludesch
06th Jan 2024 11:18

"Our very small property managment company has not ever appointed a director. The directors have become so by merit of being a shareholder, meaning some joint-shareholders cannot become a director."

This is nonsense. You clearly have directors so they were appointed. Are you trying to say that there's some provision in the Articles by which a shareholder is entitled to become a director? Which is different to not appointing directors. No idea what you mean by joint shareholders not being able to become directors - surely one becomes a director and the other is appointed alternate.

Also - not entirely sure what your problem is. If you're not happy with the Articles, you can change them - provided you have enough votes to carry a special resolution.

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By Iscream
06th Jan 2024 11:31

there was no process of 'appointment'. the shareholder became director on buying the lease. in that sense they were nominated by the process of purchase into the company and nothing else. which is fine. the question was, our articles mention re-appointment at agm's. an opportunity which is not provided by the directors. the articles also mention a provision for making directors permanent. which has never been done. The point being, that existing directors are in no way elected.

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Replying to Iscream:
RLI
By lionofludesch
06th Jan 2024 11:47

Ok - you don't see the shareholder becoming a director as an appointment. I do.

But you need a lawyer.

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Replying to Iscream:
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By Leywood
06th Jan 2024 11:49

Most of that is jibberish.

The point being, this is not a forum for free advice. The point being, this is a forum for Accountancy matters (between Accountants) not legal matters. The point being yours is a legal matter.

The point also being, you had help on your initial post, yet you didnt thank anyone. The point being now you are just wasting folks time.

The main point being that you are mis-construing quite of lot of the information.

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By Truthsayer
06th Jan 2024 12:17

Appoint an accountant and a solicitor. Why not take that advice, instead of coming back again and again with all these questions which show how out of your depth you are?

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