Can I be forced to resign from a LTD company?
I am currently a director of a Private, limited by guarantee, no share capital company. We have been told by an influential organisation that we have too many directors in our company and that we must downsize from around 7 directors to 3 directors. I have been chosen as one of the directors that will be removed / asked to resign and I am wondering whether I can be forced to do this? I don’t want to leave the company having ‘loaned’ the company a substantial amount of money.
You can be forced to resign. How much power do the other directors have (what share of the company) do they own?
Please seek advise else where too.
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In essence you are an employee of the Company irrespective as to whether it is a standard limited liability company or by guarantee. Therefore all the usual avenues of action before an Employment Tribunal are open to you.
I am slightly puzzled by the influential organisation you mention. Did it have some kind of financial involvement with your Company? If so what kind of financial involvement?
Also you mention you granted a loan of a substantial amount of money to the Company. Has this been repaid?
This situation is most unusual. Whilst resignations from the Board of a Company are not unknown the circumstances you outline are frankly disturbing.
I would suggest you obtain as much information as you possibly can especially some kind of indication as to how the selection process for enforced resignation came about.
I hope this is of some help. Please let me know if I can assist you further.