How to remove company director companies house for UK company registration

Understanding Director Removal: Legal Foundations and Requirements

Removing a director from a company registered with Companies House is a process governed by strict legal parameters within the UK corporate framework. The Companies Act 2006 establishes the foundational statutory provisions that regulate the appointment, duties, and termination of company directors. When considering director removal, shareholders and existing board members must adhere to these provisions to ensure compliance with company law and avoid potential disputes or legal challenges. The process necessitates proper documentation, adherence to the company’s articles of association, and timely notification to Companies House. Directors may resign voluntarily, be removed by ordinary resolution, or depart due to disqualification or other statutory grounds. Understanding these legal foundations is essential before initiating any director removal procedure, as non-compliance may result in rejection of the filing or potential liability issues for the company and its officers. Companies with international operations should also consider potential cross-border implications when removing directors, particularly if UK company taxation structures rely on specific directorship arrangements.

Grounds for Director Removal: Legitimate Reasons and Considerations

Directors may be removed from a UK company for various legitimate reasons. Common grounds include resignation (when a director voluntarily steps down), dismissal through shareholder resolution, disqualification by court order, death, or reaching retirement age as stipulated in the company’s articles. Corporate governance issues such as breach of fiduciary duties, failure to act in the company’s best interest, or conflicts of interest may necessitate removal. Performance-related concerns including continued absence from board meetings, failure to contribute meaningfully to company management, or inability to fulfill directorial responsibilities can also justify removal. When contemplating director removal, companies should assess whether the circumstances align with both statutory requirements and provisions in their articles of association. Proper documentation of the underlying reasons is crucial, particularly in contentious removals, as this may prove vital if the removal is challenged. For non-UK residents who have established companies in the United Kingdom, understanding these grounds is especially important as outlined in the guidance for UK company formation for non-residents.

Voluntary Resignation vs. Forced Removal: Procedural Differences

The process for removing a director varies significantly depending on whether it’s a voluntary resignation or forced removal. In voluntary resignation, the departing director must submit a formal letter of resignation to the company, clearly stating their intention to resign and the effective date. The company must then update its internal registers and file the necessary documentation with Companies House within 14 days. Forced removal, conversely, requires passing a shareholder resolution, typically an ordinary resolution with a simple majority (over 50%) of votes. Special notice of at least 28 days must be given before the meeting where this resolution will be proposed, and the affected director has the right to make representations. Forced removals often involve more complex legal considerations, potential for disputes, and stricter compliance requirements. While voluntary resignations generally proceed smoothly, forced removals may lead to challenges or claims for unfair dismissal, breach of shareholder agreements, or wrongful termination of service contracts. Companies must therefore carefully assess the appropriate route and ensure all procedural requirements are meticulously followed. For businesses looking to maintain proper directorial records during these changes, services like UK company incorporation and bookkeeping can provide valuable assistance.

Pre-Removal Considerations: Reviewing Articles of Association

Before initiating director removal, it’s essential to thoroughly review the company’s articles of association, as these may contain specific provisions that modify or supplement the default statutory procedures. The articles might stipulate enhanced voting thresholds for director removal, grant certain shareholders or classes of shares additional rights, or outline alternative removal mechanisms. They could also specify notice periods that differ from statutory minimums or establish unique procedural requirements. Some articles include express provisions for removing directors for specific reasons or under particular circumstances, which may streamline the process in those scenarios. Understanding weighted voting rights is particularly important, as certain shares might carry disproportionate voting power in directorial decisions. Additionally, the articles may address consequences of removal such as compensation entitlements or impact on share ownership. Consulting with a corporate attorney to interpret these provisions can help avoid procedural missteps that could invalidate the removal or expose the company to legal challenges. Businesses considering online registration should understand how their articles of association affect director removal when using services for company incorporation in UK online.

Checking Directorship Status: Who Can Remove a Director?

The authority to remove a director from a UK company is primarily vested in the shareholders, who can do so by ordinary resolution under Section 168 of the Companies Act 2006, regardless of any provisions in the company’s articles or agreements. This statutory provision grants shareholders significant power, though the articles of association may require a higher voting threshold than a simple majority. In companies with a sole director who is also the sole shareholder, resignation is the only practical option, as they cannot remove themselves through resolution. For companies with a corporate director structure, removal decisions must be made by the corporate entity according to its own governance procedures. Board authority to remove directors is limited and generally requires explicit provisions in the articles. In regulated sectors like financial services, regulatory authorities may have powers to disqualify directors. The company secretary, while responsible for filing the notification of removal with Companies House, does not possess removal authority. Courts may order removal in specific circumstances, such as serious breach of duties or fraudulent behavior. Understanding these hierarchies of authority is essential for companies setting up online businesses in the UK market through platforms like set up an online business in UK.

Director’s Rights During Removal: Legal Protections and Entitlements

Directors facing removal from a UK company possess several important legal protections and entitlements throughout the process. Under Section 169 of the Companies Act 2006, directors have the right to receive special notice of a resolution for their removal and to make written representations addressing the proposed removal. The company must either send these representations to shareholders or allow the director to read them at the meeting where the removal is considered. Directors may also have contractual protections through service agreements that outline termination provisions, notice periods, and potential compensation. These agreements might include garden leave provisions, post-termination restrictions, and confidentiality clauses that remain enforceable after departure. For executive directors, employment law protections apply, potentially including claims for unfair dismissal if qualifying conditions are met. Directors who are also shareholders retain their shareholder rights, including voting rights on company matters. In cases of unfair prejudice, Section 994 of the Companies Act provides remedies for directors who are also shareholders. Understanding these rights and protections is crucial for both the company and the affected director to navigate the removal process legally and fairly. For those considering becoming directors, resources like be appointed director of a UK limited company outline associated rights and responsibilities.

Required Documentation: Preparing Forms and Resolutions

Properly documenting director removal requires specific forms and resolutions. For Companies House notification, the primary document is Form TM01 (Termination of appointment of director), which must be submitted within 14 days of the director’s departure. This form requires details including the company registration number, the departing director’s name, date of birth, and the termination date. For removals by shareholder resolution, companies must prepare a formal ordinary resolution document stating the decision to remove the named director from office, which should reference Section 168 of the Companies Act 2006. Board meeting minutes documenting the resignation announcement or shareholder resolution implementation must be maintained as part of the company records. Companies should also update their internal statutory registers, specifically the register of directors, to reflect the change in directorship. In cases involving service contracts, formal termination letters addressing notice periods, outstanding remuneration, and post-termination obligations should be prepared. For contentious removals, documentation may include written representations from the affected director and records of how these were communicated to shareholders. All documentation should be prepared with precision, as errors or incomplete submissions may lead to rejection by Companies House or future disputes. Businesses can learn more about proper corporate documentation through resources like how to issue new shares in a UK limited company.

Step-by-Step Removal Process: Conducting Proper Meetings

The formal process for removing a director through shareholder resolution involves several carefully sequenced steps. Initially, the company must provide special notice of at least 28 days before the general meeting where the removal resolution will be considered, and promptly notify the affected director. The company must then convene the general meeting with proper notice to all shareholders (typically 14 clear days, though articles may specify different requirements). During this meeting, proper quorum requirements must be satisfied, and the chairperson should manage proceedings according to the company’s articles. The ordinary resolution for removal requires a simple majority vote unless the articles specify a higher threshold. The meeting should allow for any representations from the affected director to be presented, either in writing or in person. After voting, the meeting chair should announce the result and ensure it’s properly recorded in the minutes. Following successful passage of the resolution, the company secretary or designated officer must file Form TM01 with Companies House within 14 days. The company must also update its register of directors and notify relevant stakeholders such as banks, insurance providers, and contractual counterparties of the directorship change. For professional assistance with this process, businesses may consult UK companies registration and formation services.

Filing with Companies House: TM01 Form Submission Process

Properly notifying Companies House of a director’s removal requires timely submission of Form TM01 (Termination of appointment of director). This official notification can be completed online through the Companies House WebFiling service, through approved third-party software, or by submitting a paper form by post. The online submission method is preferred for its efficiency, immediate acknowledgment, and reduced risk of errors. When completing Form TM01, companies must provide accurate company details (including the company registration number), the departing director’s full name and date of birth, and the precise date the directorship terminated. The form should be submitted within 14 days of the termination date, with late filing potentially resulting in penalties for the company and its officers. For multiple director removals, separate TM01 forms must be submitted for each individual. Once processed, Companies House updates the public register to reflect the directorship change, typically within 24 hours for electronic submissions. Companies should retain confirmation of submission and the Companies House acknowledgment as proof of compliance with statutory requirements. For businesses seeking expertise on company registration procedures, resources like setting up a limited company UK provide valuable guidance on compliance with Companies House requirements.

Post-Removal Actions: Updating Company Records and Notifications

Following a director’s removal, companies must take several critical actions to ensure proper record-keeping and compliance. The company must promptly update its statutory register of directors to reflect the removal, including the precise termination date. Companies should also review and update their register of persons with significant control (PSC) if the departing director had PSC status. Business stationery, websites, email signatures, and other public-facing materials displaying the former director’s name should be revised. The company should notify its bank and financial institutions of the directorship change, potentially requiring updated mandate forms and signatory authorizations. Regulatory bodies, licensing authorities, and industry organizations should receive formal notification if the departing director was registered as a responsible person. Insurance policies, including directors’ and officers’ liability insurance, may need amendments. The company should retrieve company property from the former director, including credit cards, keys, electronic devices, and access credentials. If the director was listed as a person of responsibility for tax matters, the company should notify HM Revenue & Customs (HMRC) of the change. For companies with registered trademarks or intellectual property, relevant registries should be updated if the director was listed as a contact. For assistance with naming and branding considerations following directorship changes, resources like how to register a business name UK provide valuable guidance.

Special Situations: Removing Non-Cooperative or Absent Directors

Removing directors who are uncooperative, unreachable, or absent presents unique challenges requiring specialized procedures. When a director refuses to acknowledge or cooperate with removal proceedings, companies should meticulously document all communication attempts and proceed with the shareholder resolution process, ensuring strict adherence to statutory notice requirements. For directors who have abandoned their position through prolonged unexplained absence, companies may need to demonstrate reasonable efforts to contact them before proceeding with removal. The company’s articles may contain provisions for automatic termination after a specified period of absence from board meetings. In cases where a director is incapacitated, legal advice should be sought regarding proper procedures, as mental incapacity may automatically terminate directorship under some articles of association. When a director has relocated without providing contact information, companies must demonstrate reasonable efforts to reach them at their last known address before proceeding. Removing directors in offshore jurisdictions may involve additional procedural requirements and potentially the engagement of local legal representatives. For emergency situations involving potential harm to the company, court applications for urgent removal orders may be considered when standard procedures would cause unacceptable delay. Companies facing these special situations should maintain meticulous records of all steps taken, as these may prove crucial if the removal is later challenged. For guidance on proper company registration procedures, resources like how to register a company in the UK provide valuable information.

Handling Shared Directorships: Family Businesses and Partnerships

Removing directors in family businesses or partnership structures requires careful navigation of both legal requirements and interpersonal dynamics. In family businesses, directorship changes often intersect with complex family relationships, potentially triggering succession planning concerns and emotional responses that may complicate the formal removal process. Shareholders’ agreements in such contexts frequently contain bespoke provisions for director removal, potentially requiring family consensus or mediation before formal action. Partnership-based companies may have directors representing different partnership interests, with removal potentially affecting underlying partnership arrangements and requiring consultation with partnership committees or representatives. When removing a director who is also a family member or partner, companies should consider engagement of independent third-party mediators or family business consultants to facilitate discussions and minimize conflict. Such removals often necessitate simultaneous address of ownership stakes, with potential share transfers or buyout arrangements requiring careful planning and valuation. Companies should also consider the business continuity impact, identifying how the departing director’s responsibilities will be reassigned and how key stakeholder relationships will be maintained. In contested family or partnership removals, well-documented governance processes are essential, as courts may scrutinize whether proper procedures were followed. For professional guidance in navigating these complex scenarios, businesses may consult formation agent in the UK services with experience in family business structures.

Addressing Disqualified Directors: Automatic Removal Procedures

Director disqualification triggers specific procedures for removal from Companies House records. When a disqualification order is issued by a court under the Company Directors Disqualification Act 1986, the court notifies Companies House directly, though companies should not rely solely on this notification. Upon learning of a director’s disqualification, the company must promptly submit Form TM01 to Companies House, citing disqualification as the reason for termination. The effective termination date should match the commencement of the disqualification period specified in the court order. Companies should obtain a copy of the disqualification order if possible, as this provides definitive evidence of the legal requirement for removal. Board minutes should formally acknowledge the disqualification and the automatic vacation of the directorship position. Companies must ensure that disqualified individuals cease all directorial functions immediately, as continued involvement could constitute a criminal offense for both the individual and the company. If the disqualified director was also a person with significant control (PSC), the PSC register must be updated accordingly. Companies should review their articles of association, as some contain provisions automatically terminating directorships upon disqualification. For companies with offshore connections, consideration of international recognition of UK disqualification orders may be necessary, potentially requiring additional filings in other jurisdictions. For international business structures, services like offshore company registration UK can provide guidance on cross-border directorship issues.

Digital Signatures and Online Removal: Modern Procedures

Companies House has modernized director removal procedures through digital options that streamline the process. The WebFiling service allows companies to submit Form TM01 electronically, requiring authentication through the company’s Companies House authentication code. Digital signatures are legally valid for this purpose under the Electronic Communications Act 2000 and the Electronic Signatures Regulations 2002, provided they properly identify the signatory and demonstrate their approval of the information. Companies using third-party software for Companies House filings should ensure it complies with the Companies House XML Gateway requirements. Virtual board and shareholder meetings can now be used to approve director removals, provided the company’s articles permit such meetings and proper records are maintained. Electronic service of notices to directors and shareholders is generally acceptable if recipients have consented to electronic communications. Document sharing platforms with audit trails can help maintain evidence of the removal process, though companies should ensure these platforms meet data security requirements. When using digital methods, companies should implement appropriate verification procedures to prevent unauthorized submissions and maintain comprehensive backup records of all electronically submitted documents and confirmations. For companies offering online services, understanding digital corporate governance is particularly important, as outlined in resources like online company formation in the UK.

Common Mistakes and How to Avoid Them: Compliance Pitfalls

Avoiding common mistakes during director removal is crucial for maintaining compliance and preventing disputes. One frequent error is failing to check the company’s articles of association for specific removal procedures that may supplement or modify statutory requirements. Companies often neglect to provide appropriate notice periods to both the affected director and shareholders, potentially invalidating the removal process. Missing or incomplete documentation, such as inadequately drafted resolutions or improperly completed TM01 forms, can lead to rejection by Companies House. Companies sometimes overlook the requirement to file with Companies House within 14 days of termination, resulting in late filing penalties. Failure to properly document the decision-making process in board minutes or general meeting records can create governance gaps. Some companies incorrectly attempt to remove directors solely through board resolution without shareholder approval where required by law. Neglecting to update other company registers and official records beyond Companies House notification is another common oversight. Companies sometimes fail to consider the departing director’s other roles within the company, such as employment status or shareholding, which may require separate termination processes. Improperly handling service contracts or failing to address post-termination restrictions can lead to contractual disputes. For comprehensive guidance on proper company formation and maintenance, resources like set up a limited company in the UK provide valuable information on compliance requirements.

Handling Disputes and Challenges: Legal Recourse for Improper Removal

Disputed director removals may lead to legal challenges requiring specific resolution approaches. Directors who believe they’ve been improperly removed may seek preliminary injunctions to pause the removal process pending full hearing, particularly if procedural irregularities are alleged. Courts can issue declaratory relief confirming whether a removal was valid or void under company law and the company’s constitution. Under Section 994 of the Companies Act 2006, directors who are also shareholders may petition courts for relief from unfair prejudice if the removal unfairly disregards their interests. Wrongfully removed directors may pursue unfair dismissal claims if they were also employees and meet qualifying conditions. Breach of contract claims may arise if removal violated terms of a service agreement or shareholders’ agreement. Mediation and alternative dispute resolution can offer more expedient and cost-effective solutions than litigation, particularly for smaller companies or family businesses. Directors may seek reinstatement, compensation, or share purchase orders as remedies for improper removal. Companies facing challenges should preserve all documentation related to the removal process, as courts will scrutinize procedural compliance closely. Insurance considerations include whether directors’ and officers’ liability insurance covers legal costs associated with directorship disputes. For businesses seeking corporate services, including assistance with dispute resolution, resources like nominee director service UK 2023 guide provide information on alternative directorship arrangements.

International Dimensions: Director Removal in Multinational UK Companies

Director removal in multinational UK companies involves additional complexities requiring special consideration. Cross-border governance issues may arise when UK-registered companies operate subsidiary boards in multiple jurisdictions, potentially requiring coordination of removal processes across different legal systems. Directors serving on multiple boards within a corporate group may need to be removed from each entity separately, following the specific requirements of each jurisdiction. For companies with foreign shareholders, consideration must be given to different time zones and languages when providing notices and conducting meetings. Global business registries may have varying timelines and requirements for updating directorship information, necessitating coordination of filings across jurisdictions. Tax implications can be significant, as director removal may affect corporate residence status or permanent establishment determinations in certain tax frameworks. Companies should consider securities law requirements in relevant jurisdictions if the removal constitutes material information requiring disclosure. Regulatory notifications in regulated sectors such as financial services or telecommunications may be required across multiple jurisdictions. Employment law considerations vary significantly between countries, affecting the removal of executive directors who hold employment status in foreign jurisdictions. For businesses operating internationally, resources like business address service UK can help maintain proper corporate presence while navigating directorship changes.

Post-Removal Liability: Continuing Obligations of Former Directors

Directors continue to face certain legal obligations and potential liabilities even after removal from office. Confidentiality obligations typically persist indefinitely for sensitive company information acquired during directorship, with breaches potentially resulting in injunctive relief or damages claims. Non-compete and non-solicitation clauses in service agreements may restrict former directors’ business activities for specified periods post-removal, though enforceability varies based on reasonableness. Directors remain liable for actions taken during their tenure, with the six-year limitation period for most claims commencing from the date of the alleged breach rather than removal. The Companies Act 2006 specifically allows proceedings against former directors for breaches of duties that occurred during their appointment. Former directors may be required to assist with regulatory investigations or legal proceedings related to their directorship period. In insolvency scenarios, wrongful trading provisions can create liability for former directors who knew or should have known the company would enter insolvency. Criminal liability for offenses committed while in office persists regardless of removal. Companies should consider whether departing directors require continued directors’ and officers’ liability insurance coverage for historical actions. Proper departure documentation should address these continuing obligations, potentially including specific indemnities or ongoing cooperation requirements. For companies seeking to understand the full implications of directorship, resources like company director provide comprehensive information on director responsibilities and liabilities.

Professional Assistance: When to Seek Legal or Corporate Services

Complex director removal situations often warrant professional assistance to ensure compliance and minimize disputes. Companies should consider engaging corporate lawyers when removal involves contentious circumstances, complex service contracts, or potential litigation risk. Legal advice is particularly valuable when removing directors who hold significant shareholding, as this may trigger unfair prejudice considerations or separate shareholder disputes. When removal affects company ownership structure or requires share transfers, professional valuation experts may be needed. For international companies or those with directors based overseas, specialized advice on cross-border legal implications is advisable. Company secretarial services can assist with procedural compliance, documentation preparation, and Companies House filings, particularly valuable for companies without in-house expertise. In family businesses, family business consultants with experience in governance transitions may help navigate interpersonal dynamics. Mediation services should be considered for potentially contentious removals to avoid costly litigation. Tax advisors can address implications of director removal on the company’s tax position, particularly for international structures. For regulated entities, regulatory compliance consultants can help manage notifications to relevant authorities. Professional formation agents can provide comprehensive support for companies undergoing significant governance changes. For businesses seeking assistance with company registration and governance matters, persons with significant control resources provide insight into related compliance requirements during directorship changes.

Practical Case Studies: Real-World Examples and Lessons Learned

Examining real-world cases provides valuable insights into director removal challenges and best practices. In a family business scenario, a founder’s removal as director by second-generation family members highlighted the importance of clear succession planning and shareholders’ agreements with specific provisions for generational transitions. A court case involving procedural failures in director removal demonstrated how non-compliance with notice requirements and failure to allow the director to make representations rendered the removal invalid, requiring reinstatement and proper process repetition. A multinational company example illustrated the complexities of coordinating removals across jurisdictions, emphasizing the need for simultaneous planning of regulatory notifications in different countries. In a technology startup, removal of a founder-director who held critical intellectual property rights revealed the importance of addressing IP ownership and licensing arrangements before directorship changes. A professional services firm partnership demonstrated how removal of a partner-director required careful navigation of both partnership agreement and company law requirements. A small business case showed how failure to properly document board decisions and update statutory registers created evidentiary problems when the removal was later challenged. These cases collectively emphasize the importance of thorough planning, procedural compliance, comprehensive documentation, and consideration of the specific context in which the removal occurs. For businesses dealing with international director removal, resources like company registration with VAT and EORI numbers provide insight into related regulatory considerations.

Future-Proofing Your Board: Best Practices in Director Appointment and Removal

Implementing forward-thinking governance practices can minimize future director removal complications. Companies should develop comprehensive director service agreements clearly outlining termination procedures, notice periods, and post-termination obligations. Drafting tailored articles of association with specific provisions for director removal aligned with the company’s unique requirements provides clarity and reduces disputes. Regular governance reviews help identify potential directorship issues before they become problematic. Implementing staggered board terms can prevent simultaneous wholesale board changes that might destabilize the company. Establishing clear performance expectations and regular evaluation processes for directors creates a foundation for justified removal if necessary. Succession planning should identify potential future directors and establish development pathways, reducing emergency removal scenarios. Detailed board minutes and governance documentation establish valuable evidence trails for future reference. Director training on duties and responsibilities helps prevent behaviors that might necessitate removal. Shareholder agreements should address special majority requirements, deadlock resolution mechanisms, and specific provisions for director removal. Maintaining open communication channels between the board and shareholders reduces surprise confrontations. Regular legal reviews ensure governance documents remain compliant with evolving regulations. For businesses seeking long-term governance stability, resources like directorship provide comprehensive guidance on effective board management practices.

Navigating Companies House Online Services for Director Changes

Companies House offers sophisticated digital services for managing director changes efficiently. The WebFiling platform allows companies to submit TM01 forms electronically, with immediate acknowledgment and typically faster processing than paper submissions. Before using WebFiling, companies must register for the service and obtain their authentication code, which serves as the digital signature authorization. The Companies House Service (CHS) provides free public access to company information, allowing verification of directorship status and confirmation that removal filings have been processed. For companies managing multiple director changes, bulk filing options through the Companies House XML Gateway may be more efficient. The Follow This Company service enables email alerts about specific companies, including director changes—useful for monitoring competitors or partners. Mobile-compatible services allow submissions from various devices, offering flexibility for urgent filings. Electronic reminder services help companies avoid late filing penalties by providing alerts about upcoming deadlines. Companies should regularly check the Companies House website for service updates, as digital offerings continue to evolve. While digital services streamline the process, companies should maintain offline backup records of all submissions and acknowledgments. For businesses seeking comprehensive support with company registration and maintenance, resources like company search UK provide valuable information on accessing and utilizing Companies House data effectively.

Your Next Steps: Comprehensive Action Plan for Director Removal

Implementing a systematic approach to director removal helps ensure compliance and minimize disruption. Begin by thoroughly reviewing the company’s constitutional documents, particularly the articles of association and any shareholders’ agreement, to understand specific removal provisions. Verify the current directorship status through Companies House records to ensure accuracy before proceeding. If the removal is by resignation, obtain a formal written resignation letter from the departing director stating the effective date. For removals by resolution, prepare the special notice and resolution documentation, ensuring proper notice periods are provided to all parties. Schedule and conduct the necessary meetings according to procedural requirements, maintaining detailed minutes of all discussions and decisions. Complete Form TM01 accurately and submit it to Companies House within 14 days of the effective termination date. Update the company’s statutory registers, particularly the register of directors and potentially the PSC register. Notify relevant third parties including banks, insurers, contractual counterparties, and regulatory bodies as appropriate. Arrange for the return of company property and revocation of access credentials. Consider whether any public announcements are required, particularly for significant directorship changes in larger companies. Finally, conduct a post-process review to ensure all steps have been completed and documented properly. For businesses seeking expert assistance with these processes, company secretary resources provide insight into professional corporate governance support.

Expert Support for Your UK Company Governance Needs

Navigating director removal from Companies House requires careful attention to legal requirements and procedural details. The process, while seemingly straightforward, contains numerous potential pitfalls that can lead to disputes, invalid removals, and compliance issues. Whether dealing with voluntary resignations or contentious forced removals, companies must ensure proper documentation, timely notification, and adherence to both statutory requirements and their own constitutional documents.

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