LEGAL PRINCIPLE: COMPANY LAW – Removal of Directors – Procedure for Removal where Articles are Silent and Appointment is Not for a Fixed Term
PRINCIPLE STATEMENT
Where the Articles of Association or contract of appointment as director does not expressly specify or fix the appointment duration, such director holds office at will and may be removed or dismissed by ordinary resolution passed by the shareholders at a general meeting; in the absence of Articles specifying removal manner, statutory provisions like section 175(1) of the Companies Act, 1968 apply.
RATIO DECIDENDI (SOURCE)
"In general a director may be removed from office. The manner of removal may be specified in the Articles of Association of the Company concerned. In the absence of that the manner of removal may be in accordance with statutory provisions, like section 175 subsection (1) of the Companies Act, 1968 which applies to a director appointed for a specific or fixed time other than for life. Where the Articles of Association or the contract of appointment as director does not expressly specify or fix the duration of the director's appointment, such director holds office at will and may be removed or dismissed by an ordinary resolution passed by the shareholders of the company at a general meeting."
EXPLANATION / SCOPE
Director removal procedures follow this hierarchy: (1) Articles of Association provisions (if specified); (2) Statutory provisions (Companies Act section 175); (3) Default rule for appointments without fixed terms—removal by ordinary resolution at general meeting. Directors appointed without fixed terms hold office “at will”—subject to removal by shareholders through ordinary resolution (simple majority). This ensures shareholder control over board composition while requiring proper meeting procedures. Directors appointed for fixed terms have greater security—removal before term expiration requires cause or special provisions. “At will” doesn’t mean arbitrary removal without procedure—it means shareholders can remove without cause but must follow proper procedures: notice, general meeting, resolution. This balances shareholder control against procedural fairness.