How Can I Resign as a Director?
There are a myriad of reasons why you might want to resign as a director, no matter what the reason is, this post talks you through the steps you and the company need to take.
The steps a director needs to take to resign
- Check the terms of your service agreement or employment contract to find out if there is a specific notice period or method of resigning.
- Provide a written letter of resignation to the board of directors. Usually, a formal email will suffice, however, some directors may prefer a physical letter. If you are sending a physical letter, send it by recorded mail so that there is evidence of delivery.
- If the resigning director is also a shareholder, they should consult the shareholders’ agreement to check whether they need to transfer company shares, or follow any other procedures.
- Optionally, they may wish to inform existing clients and suppliers of their departure and provide them with details for their replacement.
The steps a company has to take when a director resigns
- Within 14 days of the date of effective resignation, the company must inform Companies House of the departure using Form TM01.
- The resignation should be recorded in the minutes of the next board meeting and the company should update its Register of Directors.
Please Note: If the resigning director is the sole director of the company, a replacement will have to be found, or else the company will be struck off.
What is displayed at Companies House after resigning?
Details of a company director who has resigned will remain on the Companies House website. However, their status will show as “resigned” as opposed to “active”.
Held details include:
- The correspondence address
- The former role of the director
- The date on which the director was appointed
- The date on which the director resigned
- The nationality of the director
- The directors’ country of residence
- The directors’ listed occupation
Liability after resigning
Company directors have a set of general duties as set out in the Companies Act 2006. Once a director has resigned, they are no longer liable for future acts or omissions of the company. However, if the company goes through insolvency, the conduct of all company directors during the previous 3 years will be investigated and can be held liable for failures of their duties, even if they are currently resigned.
Furthermore, directors who continue to exert influence over the board following their resignation may be considered to be shadow (a.k.a. de facto) directors and therefore will still be held liable.