From 28 April 2013, the model articles applying to companies will be amended to remove the provisions regarding termination of a director’s appointment on the grounds of mental health.
The Mental Health (Discrimination) Act 2013 is intended to protect against discrimination on the grounds of mental health and to help to remove the stigma associated with mental illness.
The Act will protect company directors from losing their positions on the grounds of mental health by amending the model articles set out in the Companies (Model Articles) Regulations by removing the provisions regarding termination of a director’s appointment on the grounds of mental health.
This will apply to private companies limited by shares, private companies limited by guarantee and public companies limited by shares.
Currently the model articles state that a person ceases to be a director as soon as:
“by reason of that person’s mental health, a court makes an order which wholly or partly prevents that person from personally exercising any powers or rights which that person would otherwise have.”
This wording will continue to form part of the articles of any company that has adopted the model articles prior to 28th April 2013. If the company wants to delete this wording, its shareholders will have to pass a special resolution to amend the articles in the usual way although there is no requirement for companies to do so.
For more information please contact one of our Company & Commercial solicitors at firstname.lastname@example.org.