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Procedure for appointment - Coggle Diagram
Procedure for appointment
The first directors of a company are those whose names are entered on Form IN01 and submitted to the Registrar for the purpose of incorporating the company
Subsequent appointments as directors of the company are governed by the provisions of the company's Articles, these usually provide that the board itself may or the members in the GM may fill any casual vacancies or appoint additional directors up to the maximum number
A casual vacancy is one arising from death, resignation or termination of appointment of director
Before the meeting to consider the shortlist of candidates, the CS should circulate to the directors
All relevant information about the director
A summary of the proposed remuneration arrangements including any bonus and share incentive arrangements if an executive position
A summary of the company's remuneration policy to ensure compliance
A draft of the service contract
Copies of any regulatory notices or press releases that will be issued upon the directors appointment
Once a suitable candidate has been identified and any qualification or regulatory criteria satisfied the process for appointment should be followed
Members can either circulate their own resolution in writing or submit a requisition for a general meeting to be held to appoint a new, specified director
Members of public companies and traded companies can put forward resolutions to be considered at the AGM provided it is received at least six weeks prior to the meeting and is given by the requisite number of members or members holding the requisite percentage of voting rights
Obtain written confirmation from the appointee that they consent to be appointed as a director, this is particuarly important as Forms AP01/AP02 are no longer required to be signed by the appointee consenting to act. Without this consent it may be difficult to prove that the person has consented to be appointed and if there is a dispute application can be made to the Register for the appointment to be struck out
The board resolves to appoint the new director either at a meeting of directors or by WR
The CS should deal with
Request personal particulars, including full name, residential address, full DOB, nationality and occupation which are required to complete Form AP01 and AP02 and make the necessary entry in the register of directors
On receipt of the relevant information from the director, make the necessary entries in the register of directors and the register of directors residential addresses. The completed Form AP01 or AP02 must be sent to the Registrar within 14 days of the date of appointment
If the director will be signing cheques on the company's behalf, an amended bank mandate and a specimen signature should be sent to the company's bank
Providing details to the director of any share or other qualifications that must be acquired under the Articles and the time allowed in which to do this
Requesting the director to give a general or specific notice of any interests, such as in contracts between the company and customers or suppliers (CA2006 ss.182 and 185)
Inviting the director to give notice of their interests in shares in the company. Although there is no longer a requirement to keep a register of directors interests in shares, any interests do need to be disclosed in the accounts and for listed companies, interests and changes to those interests need to be disclosed
Providing dates of forthcoming board meetings
Enquiring how the director wises their remuneration to be paid, eg sent to their home address or paid direct into their bank account, including information regarding their Pay As You Earn (PAYE) tax coding and NI contributions
Providing general information about the business of the company if the newly appointed director is not already involved in the company. Copies of the Articles, reports and accounts for recent years and interim reports and circulars should be made available if required
(Traded companies only) Providing a copy of the company's rules for securities transactions, if any, and asking the director to acknowledge receipt
(Traded companies only) A RIS should be notified of the appointment by the end of the business day following the decision to appoint the direct (LR). Details of the directors business activities must be disclosed to a regulatory information service within 14 days. Details of any interests in shares of the company must also be disclosed within 5 days of their appointment.
If appropriate, a press announcement should be sent to newspapers or through the company's press agents
Where a director is not required to have a share qualification, it is usual for the Articles to provide that the director may receive notice of and attend and speak at, general meetings of the company. As a non-shareholder, they would not otherwise have such power except if acting as chair of the meeting
If the company has an insurance policy covering directors and officers of the company against liabilities incurred in carrying out their duties, the insurance company should be notified of the appointment of the new director, either at the time of appointment or at renewal depending upon the wording of the policy
All newly appointed directors, even experienced directors should receive some form of director induction tailored to their specific requirements.