All Irish companies types are currently required to have a minimum of two directors with the exception of a Private Limited by Shares company which can have one director if it chooses. One of the directors is required to be resident in a member state of the European Economic Area, unless the company holds a bond in the prescribed form or is exempt from the requirement.
Appointment Of Directors
A company’s Constitution normally provide for the appointment of directors by ordinary resolution of the shareholders. The Board of Directors may also appoint additional directors to fill a casual vacancy. The Constitution may also prescribe the maximum number of directors as current legislation does not provide for a statutory maximum.
A corporate body cannot act as a director of an Irish company, nor can an undischarged bankrupt or a company’s auditor. Section 144 of the Companies Act 2014 provides that a director appointed by the Board of Directors must seek re-election at the next Annual General Meeting (“AGM”). This regulation may be excluded by a company’s constitution.
The re-election is additional and not taken into account in calculating which directors retire by rotation in case of a CLG (Company Limited by Guarantee) or PLC (Public Limited Company).
Retirement Of Directors
In the case of a CLG or a PLC, one-third of the directors (or the nearest whole number) must retire by rotation at each AGM unless the company’s constitution provides otherwise. If two of more persons were originally appointed on the same day, those to retire should be agreed between them or determined by lot.
The directors retiring can offer themselves for re-election at the AGM.
Removal Of Directors
Section 146 of the Companies Act 2014 provides that a director can be removed during their term of office by an ordinary resolution at a general meeting. A least 28 days notice must be given in relation to the resolution proposing to remove a director.
It is important to note that the director must be given the opportunity to speak at the meeting and must receive a copy of the notice of the resolution. The director is also entitled to make representations in writing to the company upon receipt of the notice.
Where a director is appointed for life by a company’s Constitution, such a director can only be removed if the correct procedure for the alteration of the Articles of Association is followed.
As a starting point for any statutory changes to the Board of Directors, it is important to review a company’s Constitution in order to comply fully with these requirements. Also, companies must keep a register of directors and must notify the Registrar of Companies within 14 days of a directors appointment, resignation and removal on a Statutory Form B10.
Public Limited Companies which are listed on a worldwide Stock Exchange will also have additional obligations that must be adhered to.
The company secretary or a company secretarial advisor are best placed to advise on the various matters surrounding the appointment, retirement and removal for Irish Companies and appropriate advice should be sought to avoid any misinterpretations.
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