What should be done if an administrator refuses to resign?

A director's refusal to resign does not necessarily mean they must remain in office. The possibility of terminating their mandate, through removal, depends on the company's situation and the rules that apply to it.

First, a distinction must be made between resignation, which results from a director's decision to leave their position, and removal, which, if the applicable conditions are met, can terminate their mandate without their consent. Indeed, certain situations may justify shareholders considering replacing a director who refuses to resign; removal then becomes a possible solution, subject to the applicable rules.

The procedure to be followed depends in particular on the law under which the company was incorporated, how the administrator was elected or appointed, the duration of his term of office and the rights attached to the different classes of shares, where applicable.

Before taking any action, it may be necessary to:

• check the applicable law as well as the company's statutes and regulations;
• examine any agreement between shareholders that may have an impact on the situation;
• to determine, from a legal standpoint, who has the power to terminate the mandate or to proceed with the replacement;
• comply with the rules applicable to the convening, voting and required decisions; when the removal is the responsibility of the shareholders, the decision may, depending on the circumstances and the applicable rules, be taken at a shareholders' meeting or recorded by a written resolution;
• update corporate records and make required government filings when the change takes effect.

In certain situations, particularly when there is significant disagreement between shareholders or a dispute concerning the powers of each, the situation may require further legal analysis.

In summary , a director who refuses to resign cannot necessarily be compelled to submit a resignation, but their term may, depending on the circumstances, end in another way, including through removal in accordance with applicable rules. It is therefore important to determine the appropriate procedure before taking action.