Removed as a Director but Still an Employee or Shareholder: What Actually Ends?
This article is for you if:
You have been told to resign from a company board.
You are still employed by, or own shares in, the company.
A TM01, leaver clause or share transfer has appeared during a dispute.
Being removed as a director does not necessarily dismiss you, cancel your shares or release a guarantee. A founder or MD may simultaneously be an office holder, employee, shareholder, option holder and seller under a share purchase agreement. Each role has its own document, ending mechanism and date.
Start with a role map
Capacity | Controlling documents | Question to answer |
|---|---|---|
Director | Companies Act, articles, resolutions | What power ended the office, and when? |
Employee | Service agreement, dismissal letter | Did employment end, or does salary continue? |
Shareholder | Register of members, articles, shareholders’ agreement | Was a valid transfer triggered and at what price? |
Option holder | Plan rules, award notice | Did vesting, lapse or an exercise window begin? |
Seller/guarantor | SPA or guarantee | Which continuing obligations and payments survive? |
Sections 168–169 of the Companies Act 2006 allow shareholders to remove a director by ordinary resolution at a meeting, despite a contrary agreement. Special-notice rules and the director’s rights to representations and to be heard still matter. Section 168(5) preserves possible compensation or damages. A private company cannot use the written-resolution procedure for this statutory removal route.
A board may instead rely on an article provision, accept a resignation or terminate employment. Ask for the exact power, notice, resolution, voting record and effective date. A Companies House change must normally be reported within 14 days, but TM01 records an event; it does not create authority or settle contractual rights.
Caira can compare uploaded articles, service agreements, board notices and cap-table spreadsheets, then pull the relevant role and date clauses into one view.
Three exits that are not the same
A founder-CEO is removed by shareholders on Monday, put on garden leave on Tuesday and dismissed six weeks later. Board access may end Monday, while salary and benefits continue until the separate employment termination date.
An MD is summarily dismissed and the articles make employment termination end their office. They still own 18% of the ordinary shares. Whether a compulsory transfer follows—and whether price is fair value or nominal value—depends on the leaver wording, not the TM01.
A non-executive director has an appointment letter but no employment relationship. Removal may end office and fees without employee rights, although contractual notice or compensation may remain. GOV.UK confirms that an office holder can, but need not, also be an employee.
Check the money and deadlines separately
Build a short schedule covering salary, notice/PILON, benefits, holiday, bonus, deferred pay, options, shares, dividends already declared, director fees, shareholder loans, earn-out and guarantees. For every item record the clause, trigger date, amount, payer and deadline. Caira can turn that material into an easy-to-understand comparison and a focused response asking the company to identify missing authority or calculations.
Share ownership is proved primarily through the register of members. Then check deemed-transfer notices, valuation date, valuer, leaver classification, pre-emption and payment timing. Exclusion from management can sometimes contribute to an unfair-prejudice petition under sections 994–996, but harsh treatment alone is not enough: the company arrangements, understandings and conduct matter. The Supreme Court’s 2026 decisions in THG v Zedra and Saxon Woods v Costa underline the technical procedure and director-duty analysis.
Do not copy company data after access ends. Preserve lawfully held notices, contracts, payslips, award documents and meeting communications. A resignation should also be checked for subsidiary offices, releases, share-transfer language, bank authority and return-of-property promises.
Caira has a 14-day free trial, then plans from about £15 a month.
Questions people often hesitate to ask
Does a TM01 dismiss me?
No. It records the end of a directorship. Employment needs its own contractual or legal ending mechanism.
Can shareholders remove me even if my service contract says otherwise?
Section 168 can still operate, but contractual damages and other rights may survive.
Have I automatically lost my shares?
No. Identify a valid transfer mechanism, trigger, valuation rule and completed transfer.
Do director duties disappear immediately?
Not entirely. Section 170 preserves aspects of the conflict and benefit duties after a person ceases to be a director.
This article is general information, not legal, financial, tax or medical advice.
