Removal of a Director in Sri Lanka: The Complete Guide
Removing a director from a Sri Lankan company isn’t as simple as a board vote — the Companies Act sets out a specific legal process, and skipping a step can make the removal invalid. This guide walks through exactly what’s required, from the first notice to the final filing.
Why a Director Can’t Just Be “Voted Out” Informally
Section 206 of the Companies Act, No. 07 of 2007 governs the removal of directors in Sri Lanka. It gives shareholders the power to remove a director by ordinary resolution — but it also protects the director’s right to a fair process. Skipping that process can leave the removal open to legal challenge.
Step 1: Notify the Director
Before anything else, the director must be formally notified in writing that a resolution to remove them is being proposed. This notice should include:
- The grounds for removal
- The date of the meeting where the resolution will be voted on
- A clear statement of their right to respond
Step 2: The Director’s Right to Representation
This is the step most companies get wrong. Under Section 206, the director has the right to submit a written representation responding to the proposed removal — typically within 14 days of receiving notice. That representation must be circulated to all shareholders before the vote takes place. Removing a director without giving them this opportunity is a common way the process gets successfully challenged later.
Step 3: Call the Meeting Correctly
The notice calling the shareholders’ meeting (the EGM Notice) must explicitly state that the purpose of the meeting is to consider removing the director. A generic “general business” meeting notice isn’t sufficient — the specific purpose has to be on record.
Step 4: Pass the Resolution
At the meeting, the resolution to remove the director is passed by ordinary resolution — a simple majority of shareholders voting in favour. The EGM Minutes should record:
- Who was present
- The resolution as voted on
- The outcome of the vote
- A note that Form 20 will be filed to reflect the change
Step 5: File Form 20
Once the resolution is passed, the company has 20 days to file Form 20 with the Registrar General of Companies, notifying them of the change. This is typically filed together with a certified Extract of the Resolution — a short, standalone document confirming exactly what was resolved, without needing to send the Registrar the full minutes.
What Documents You Actually Need
Putting the above together, a complete director removal needs:
- A formal letter to the director — giving notice and the 14-day right to respond
- An EGM Notice — calling the meeting, stating the purpose explicitly
- EGM Minutes — recording the resolution being passed
- An Extract of Resolution — for filing with Form 20
Frequently Asked Questions
Can a director be removed without a meeting? No — Sri Lankan law requires a proper shareholders’ meeting where the resolution is voted on, following notice to the director.
What if the director refuses to accept the notice? Send it by registered post and keep the post slip — that’s your evidence the notice was properly served, regardless of whether it’s collected.
Does the director get to vote on their own removal? If they hold shares, yes, in their capacity as a shareholder — but this doesn’t change the outcome if the majority votes in favour.
What happens if we don’t file Form 20 in time? Late filing can result in penalties, and until it’s filed, the Registrar’s records won’t reflect the change — which can cause problems with banks, contracts, and other filings that rely on the official director list.
Can the removed director dispute the decision afterward? Yes, particularly if the correct process (notice, right to representation, proper meeting) wasn’t followed. This is exactly why documenting each step matters.
Get the Documents You Need
Rather than drafting each of these from scratch, our Removal of a Director Pack includes all 4 documents — the formal letter, EGM notice, EGM minutes, and extract of resolution — ready to fill in and use.
Sources
- Companies Act, No. 07 of 2007, Section 206 — full text (PDF)
- Department of the Registrar of Companies, Sri Lanka
