Table of Contents
Most commonly, directors are appointed by the shareholders at the Annual General Meeting (AGM), or in extreme circumstances, at an Extraordinary General Meeting (EGM). A resolution for the appointment is put to a vote, and passed if a majority of shares are voted in favour.
Shareholders and directors have two completely different roles in a company. The shareholders (also called members) own the company by owning its shares and the directors manage it. Unless the articles say so (and most do not) a director does not need to be a shareholder and a shareholder has no right to be a director.
Can a shareholder appoint themselves as a director?
During the company formation process, the members (shareholders or guarantors) will decide who to appoint. In many cases, members appoint themselves as company directors. After incorporation, director appointments need to be carried out using a formal process.
Can a shareholder run for director?
It’s important to note that a shareholder can be a director in the company as well.
Can anyone become a director?
The qualifications needed to become a film director are less about formal credentials, and more about hands-on experience. There are many directors that have no formal education whatsoever. So, what does it really take to become a movie director? You have to prove you can direct before anyone will hire you to direct.
Unless the articles say so (and most do not) a director does not need to be a shareholder and a shareholder has no right to be a director. The separation in law between directors and shareholders can cause confusion in private companies.
Can a shareholder appoint a director without a formal appointment?
As far as company law is concerned, the lack of formal appointment is not a barrier. The law treats them as directors. Apropos shareholdings, some shareholders have, either under the company’s Articles of Association or a separate shareholders’ agreement, the right to appoint one or more directors.
Can a holding company appoint directors of a subsidiary company?
They may require that new director appointments are approved by more than a simple majority of shareholders. They may allow the directors or shareholders of a holding company to appoint the directors of a subsidiary company.
Can a director change the Articles of a company?
Under the Companies Acts some decisions, such as changing the company’s articles, can only be made by the shareholders. Many others are decisions for the directors but the directors may need the shareholders’ consent, by means of an ordinary or special resolution.