Removing a Director

Hi,

We have a company which is a limited company with 100 shares, 40% of them belong to 2 directors and the 3rd director who is the managing director owns 60% shareholding.

The majority shareholder has completely went off the grid with no communication whatsoever for 5 weeks, despite many texts, emails etc. This is the 4th time it happened. Did not turn up for the monthly board meeting - no comunication or reason for not turning up. Currently someone is owned money but the majority shareholder has all the access to the financial accounts - therefore we are powerless to pay this person - hence the business has grounded to a halt.

We are thinking of removing this director and wonder do we have any case to do so?

Any help would be appreciated - turning out to be a very stressful situation.

Thanks
Kildare Build

Refer to your own Memorandum and Articles of Association in the first place and if necessary (I would suggest it is in this case) refer to a solicitor unconnected with the majority shareholder.

Have you minuted Directors' meetings held in MD's absences with a "no contact since mm/dd/yyyy date" minuted? It is important that you and fellow director document every single step you are taking.

Sorry to hear of your difficult situation. You should consider the two issues that of directors and shareholders as separate functions. It is the directors duty of care to run the company in a conciencious way. The shareholding normally has no place in the boardroom unless there is seperate unbalanced a voting in the Articles. The shareholders relationship to company should be from the profits the business generates in dividends payments and/or if you sell the company.
At the moment you appear to have the majority in the boardroom which you can use to change the way the company is run but of course as a major shareholder the other director could call an AGM and potentially have you removed. You then also have protection as a minority shareholder but all this could become very messy indeed.
My guess is that the major shareholder/director has gone awol perhaps due to stress. You need to assess the situation carefully, talk to the director stating that this is an unsustainable situation to have one director holding all the financial data, going awol when you are all jointly liable if something goes wrong.

Consult independent legal advice asap with someone competent in company law.