How to Remove a Director (TM01): The Complete UK Guide

The four ways a director can leave

A director's appointment can end in four broad ways. First, the director can resign voluntarily. Second, the shareholders can vote to remove the director before their term of office ends, using an ordinary resolution under section 168 of the Companies Act 2006. Third, a director can be disqualified by a court or the Insolvency Service, which bans them from acting. Fourth, the appointment ends automatically on the director's death.

The route you use matters because it determines the paperwork, the notice you must give, and the risk you carry. A cooperative resignation is quick and low risk. A forced removal against the director's wishes engages statutory protections that the director can use to defend their position. Disqualification is out of the company's hands and follows a legal or regulatory process led by others.

Whichever route applies, one thing is constant. Once a person ceases to be a director, the company must tell Companies House of the change and the date it happened within 14 days, under section 167 of the Companies Act 2006. Missing that deadline is an offence for the company and its officers in default.

Resignation: the simplest route

If a director agrees to leave, resignation is by far the cleanest option. The director gives notice in the way set out in the company's articles of association and any service agreement, and the appointment ends on the effective date. There is no shareholders' vote to organise and no special notice to serve.

The company should keep a written record of the resignation, update its own statutory register of directors, and then file form TM01 with Companies House. The 14-day clock runs from the date the resignation takes effect, so agree that date clearly and in writing to avoid any dispute later.

Take particular care where the resigning director is the only director. A company must have at least one director at all times, and letting the last one go without appointing a replacement can leave the company unable to act lawfully. Sort out the succession before, not after, the resignation takes effect.

Removal by ordinary resolution under section 168

When a director will not go voluntarily, the shareholders can remove them. Section 168 of the Companies Act 2006 gives a company the power to remove a director by ordinary resolution at a meeting, before the end of that director's period of office, and it does so notwithstanding anything in any agreement between the company and the director. An ordinary resolution needs a simple majority of the votes cast.

This statutory power comes with a strict procedural condition. Special notice is required of any resolution to remove a director under section 168, and also of any resolution to appoint a replacement at the same meeting. Special notice means the person proposing the resolution must give the company advance notice of it, and the company must in turn notify its members, so that everyone has warning before the vote.

Section 168 is powerful but it is not a licence to ignore the director's other rights. The section expressly preserves any compensation or damages payable to the removed director in respect of the termination of their appointment. In other words, you can remove a director from the board, but you may still owe them money if doing so breaks a service contract.

The director's right to protest under section 169

A director facing removal is not a passive bystander. Section 169 of the Companies Act 2006 gives them a right to protest against removal. On receiving notice of a resolution to remove them under section 168, the company must immediately send a copy to the director concerned.

The director is entitled to be heard on the resolution at the meeting, whether or not they are a member of the company. They can also make written representations of reasonable length and ask the company to circulate them to members. If the request is timely, the company must state in the notice of the resolution that representations have been made and send a copy to every member who receives notice of the meeting.

If the representations arrive too late to circulate, or the company fails to send them out through its own default, the director can require them to be read out at the meeting. These rights are not unlimited. A court can direct that the representations need not be circulated or read if satisfied that the rights are being abused, and may order the director to pay the company's costs. Even so, ignoring section 169 is a serious mistake that can undermine an otherwise valid removal.

Filing form TM01 with Companies House

Once a director has ceased to hold office, by any route, the company must tell Companies House. The form for this is the TM01, titled Termination of appointment of director, filed in accordance with section 167G of the Companies Act 2006. You can file it through the Companies House online service, which is quicker, or send a paper form by post.

The TM01 asks for the company name and number exactly as they appear on the public register, the director's current details as held on the register, and the date of termination of the appointment. Only one director's appointment can be terminated per form, so a board that loses two directors needs two forms. You do not need to include a signature, but the form must be authenticated by someone entitled to do so, such as a director, the company secretary, or another authorised person.

Two practical points are easy to miss. First, all the information on the form appears on the public record, so treat it as a public document. Second, you cannot use the TM01 to end the appointment of a company secretary. That requires form TM02 instead. Get the form right and the register updates cleanly; get it wrong and Companies House may return it, eating into your 14-day window.

Disqualification and death

Not every departure is engineered by the company. A director can be disqualified, meaning they are banned from being a company director if they do not meet their legal responsibilities. Disqualification can last for up to 15 years. It can be pursued by the Insolvency Service, and other bodies such as Companies House, the Competition and Markets Authority, the courts and a company insolvency practitioner can apply to have a person disqualified in certain circumstances.

Grounds for disqualification include allowing a company to keep trading when it cannot pay its debts, not keeping proper accounting records, not sending accounts and returns to Companies House, not paying tax owed by the company, and using company money or assets for personal benefit. Breaking the terms of a disqualification is serious: a person can be fined or sent to prison for up to two years. When a director is disqualified they cease to hold office, and the company must still file a TM01 to reflect that on the register.

The final route needs little explanation. A director's appointment ends automatically on death. The company still has an administrative duty to update Companies House using the TM01 within the usual 14-day window.

The risks to manage before you act

Removing a director from the board is a governance act, not a magic wand that dissolves every legal relationship the person has with the company. Section 168 lets shareholders vote a director off the board even where an agreement says otherwise, but it expressly preserves the director's right to compensation or damages for the termination of their appointment. A director who is also an employee under a service contract may have a claim for wrongful or unfair dismissal that the removal vote does nothing to remove.

A director who is also a shareholder brings a further risk. If they feel the company's affairs are being run in a way that unfairly harms their interests as a member, they may bring an unfair prejudice petition. That is why forced removals should be planned with legal advice, with the articles, any shareholders agreement, and any service contract all read together before a resolution is proposed.

The sole-director trap deserves a final warning. Because a company must always have at least one director, removing or accepting the resignation of the last remaining director without a replacement in place can paralyse the company. Sequence the appointment of a successor and the departure of the outgoing director so the board is never left empty.

Conclusion

Removing a director is really two jobs done in the right order. First comes the legal act that ends the appointment: a signed resignation, a section 168 ordinary resolution passed with special notice and the director's section 169 rights respected, a disqualification, or death. Only then comes the administrative act of telling Companies House on form TM01, within 14 days of the change, so the public register stays accurate.

The traps that catch people out are rarely the form itself. They are the compensation and unfair dismissal claims that a board vote does not extinguish, the unfair prejudice risk where a departing director is also a shareholder, and the sole-director problem of leaving a company with no one lawfully in charge. Read the articles and any service contract first, take advice on contested removals, and keep clean written records of every step. If you are setting up governance from scratch and want your director records right from day one, see how Nasara Connect helps you start a company and keep control of your statutory registers.

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