Removal of director ltd company

[imnotthatkindofmum]

Hoping someone can help.

Out of the blue my husband's business partner has decided he doesn't want to work with him anymore. Today he has just said "I'm done" and now he has "resigned" my husband as a director and instated his wife instead.

They have worked together for years as partners. This is a relatively new ltd company for a new venture. I don't believe they have a partnership agreement as they've done everything together for 11 years.

My husband owns a 50% share of the company.

So my question is can his business partner just resign him from his director post without his agreement?

I'm also concerned he will try to withhold money for this month now my husband isn't a director.

Full disclosure in case it makes a difference. Thanks to Covid their previous (very successful) business failed and they both have debts in that one which need to be paid. They also closed another business last year which was a Covid related venture that had run its course. This new one is the idea that grew from the ashes of the Covid nightmare! Whilst this one was being "grown" Dh was mostly running the other business that closed last year and business partner was doing most of the growing.

It depends.....
https://www.gannons.co.uk/insights/removing-a-director/

50/50 with no shareholder agreement and bog standard articles with no casting vote for the chair and assuming the 2 of them were the only directors - no he can't remove a director and he can't appoint one without your husband agreeing.

Directors are either appointed by a majority of the board or votes by 50.01% holders of shares.

Further, even if he could do it there is a statutory process that needs to be followed and an actual meeting of the shareholders to approve it. Which wouldn't pass as your husband could block it with his 50%.

So your husband needs to get legal advice asap.

(This is why shareholder agreements are vital)

https://www.lblaw.co.uk/services-for-business/corporate-law-services/shareholders-agreements/removal-of-directors

Requires more than 50% of the shareholders to agree.. there are time limits.. but in reality where there are 2 directors, the quasi partnership needs to be devolved.. he has to be bought out.. but if there is no value in the company, there is nothing to buy out.

It sounds awkward at best.. your husband needs legal advice if he believes he is owed something from this new business.