The articles of our flat management company state that to be a Director you must be a member of the company and to be a member you must own a lease of a flat in block owned by company. One flat was shown in leaseholder/member records as being owned by Mr & Mrs A. A recent audit of members by checking with the Land Registry showed flat was actually owned by Mr B, Mrs A's brother, and always has been. Company records would appear to have been corrupted years ago and the true ownership was not known to current directors and our current accountant performing company secretarial duties. Mr & Mrs A have not divulged or drawn our attention to the error. At an AGM, Mrs A was appointed a Director. Mrs A inaccurately signed a declaration that she was a member of the company on her nomination form.
For the last two years, in good faith, but as we now know, erroneously, we have held out to the world that Mrs A is a Director, via filing form AP1, the confirmation statements and the notes to the financial statements.
We are now removing her as a Director but there is a difference of opinion between our advisers.
- One insists that as she should never have been a director, the appointment is null and void and hence we cannot file a Form TM01 as “how can we terminate someone who was never a director?” He has contacted Companies House and they advise using Form RP02A which effectively would state that all filings for Mrs A were erroneous.
- The other view is that we have treated and referred to Mrs A as a director and held out to the world that she is, despite the disqualification to be so in the articles. The outside world knowing no better than the filed information must think she is. And therefore we can remove her as a director using the standard form TM01.
Which is the correct treatment, please?
Replies (4)
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I had not heard of form RP02A, but it seems to be the correct form to amend an incorrect form AP01. The reason "is factually incorrect or is derived from something factually incorrect" seems appropriate.
I assume that Mrs A was not the only director of the company.
My preference is always to follow the line of least resistance unless there is a powerful reason for doing otherwise. The line of least resistance here is to deal with this as a normal resignation or removal of a sitting director.
You can not 'just' remove a director. The companies Act gives the procedure which you must follow.
In brief, you need to tell the person - giving the required notice - what the problem is. The members can then pass a resolution removing the person from the board.
She (Mrs A) is a director until she is removed.