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BUSINESS TIPS

What Happens to a Company with no Directors?

There are circumstances that can leave a company with no directors. Such circumstances include where a sole director:

  • Is removed from office by the shareholders.
  • Dies or becomes incapacitated.
  • Chooses to resign.
  • Automatically loses their position, for example when they have been disqualified from acting as a director or fail to satisfy a condition laid out in the company‚Äôs Articles of Association.

Companies with multiple directors could also find that they are left with no directors, for example if all of the directors are involved in an accident or if the directors are required to retire by rotation and none are re-elected.

When a company finds it has no directors it is in breach of the Companies Act 2006, which requires a private limited company to have at least one director and a public limited company to have a minimum of two. In such cases, any shareholder can request that a general meeting is held for a new director to be appointed. If the company has a company secretary appointed, they will arrange for the meeting to be held.

The appointment of the previous directors should be terminated and the new directors appointed with Companies House in the usual manner. Issues can occur where a sole director dies who was also the single member of the company. The company can include provisions within the Articles of Association that can aid the company if it is left with no directors, such as allowing the executor of a deceased sole shareholder to appoint a new director.

If you require assistance with company secretarial matters for your limited company, please contact our specialist company secretarial team on 020 8429 9245.