PROCEDURES FOR REMOVAL OF DIRECTOR UNDER CAMA 2020

Share this:

Companies and Allied Matters Act, 2020  (“CAMA 2020”), allows shareholders in an annual general meeting (“AGM”) or extra-ordinary meeting (“EGM”) to remove any director subject to the certain procedures and graduated notices. – All reference to sections or sub-section is  reference to CAMA 2020.

As a preliminary step (s.288 CAMA 2020) requires a company whether private limited by shares or public limited liability or limited by guarantee or unlimited company to remove any director through ordinary resolution.

It is important to carefully lock-in the steps otherwise the removal is invalid in law and, will be successfully challenged in Court.

The director to be removed must be given 21 days special notice of the company’s intention to remove him and he may make representation in writing and except where the director to be removed sends in its written representation in the nick of time, the company must circulate the written representation to members (s.288 (2) & (3)).

Provided that where the representation is not circulated as required because it was received too late, the director to be removed may request that the representation be read at the meeting.

The representation by the director to be removed need not be circulated or read out if an aggrieved party can show the Court that circulating or reading it out is aimed at needlessly publication of defamatory matters.

The said 21 (twenty-one) days’ notice will be sent to all members and directors through their registered address. The date of dispatch of the notice is included in computing number of days (S.241).

It is important to annex any written representation by the director to be removed. A registered address includes a physical or electronic address (S.244(6).

Any notice of meeting should specify place, date and time of the meeting, and the general nature of the business to be transacted in sufficient detail to enable those to whom it is given to decide whether to attend or not (S.242);

If it is an AGM, a statement that the purpose is to transact the ordinary business of an annual general meeting is deemed to be a sufficient specification that the business includes removal of any director (S.242(2);

We note that a private company may hold its general meeting electronically provided that such meetings are conducted in accordance with the articles of the company (s.240(2).

The following persons are entitled to receive notice of an AGM or EGM:

  • every member;
  • every person upon whom the ownership of a share devolves by reason of his being a legal representative, receiver or a trustee in bankruptcy of a member;
  • every director of the company;
  • every auditor for the time being of the company; and
  • the secretary, and Commission in the case of public companies (s. .243).

A copy of the proposed resolution may be circulated. That it was not circulated does not invalidate the meeting or consequent removal of any directors.

There is no particular form of a notice required under CAMA. Essentially, the content is most important than the form.

Bear in mind that the notice of removal of any director should be filed with the Corporate Affairs Commission within 14 days otherwise a default fee or penalty will apply.

Did you find this article helpful?

Book a consultation with SRJ today to get more personalized answers to your legal questions. Click the button below to schedule a free 15-mins consultation.