Resigning as Company Director
There is a so many reasons why you might want to resign as a Director from a limited company Maybe you are retiring , a new business challenge or simply you just want to move to a different industry or relocate.Sometimes it could be that the shareholders want you to resign due to disagreements or a dispute.
The resignation process is quite simple no matter what the reasons are. You need to ensure that all the steps are followed correctly and that you take advice.
Inform the rest of the directors
Filing a TM01 is NOT enough!
There appears to be a common misconception that once you have filed the TM01 , Companies House will take your name off and that’s it. This si NOT the case.
The TM01 form takes care of the administrative side of things for you, but you MUST let your fellow directors and shareholders know what you intend to do. A formal written letter or notice is the best way forward, either by post ,addressed to the Company address or email or just wait until you are next in the office. You will need to let them know the date when your resignation will be effective from and
The TM01 form is to make Companies House aware that you have already resigned, so that they can take you off their records.
It is the Company’s responsibility, not that of the resigning director, to tell Companies House – if the director does try to send form TM01 to Companies House, it may well be rejected. The company should inform Companies House within 14 days of the date the officer left office. This is done by completing form TM01 for directors, form TM02 for company secretaries or form LLTM01 for LLP members.
If another Director is appointed in your place then the appropriate officer appointment form will also need to be submitted to Companies House, though once again this isn’t part of your responsibilities.
Your name on the register at Companies House
Your name will remain associated with the company in some ways as you used to be a part of the business , your details will likely still be viewable via Companies House, whenever somebody searches for information about the Company in question You will be listed as ‘resigned’, so people will at the very least understand that you are not part of that business any longer.
The information which others will be able to see will be, your name, date of birth and the dates which you started working for the company and resigned from the Company.
Trying to get all your details removed from Companies House directly is not possible unless by way of a Court application. Also, it is most likely that details about you will appear on older documentation, such as your previous business’ end of year accounts, and they will all still be on file.
After you resigne
Once you have officially resigned and the paperwork has been filed, you will no longer be a Director and so from this point onwards your responsibilities at the Company ceases. This also means that
If the company in question encounters financial problems/difficulties at any point in the future, this will have no impact on you if the Company is NOT placed into a formal insolvency process. An insolvency Practitioner will contact you if the date of insolvency is within 3 years from your resignation to ask for certain information and details about your role and responsibility whilst you were acting as Director.
If all directors of a company resign?
It is stated in the Companies Act 2006 that a private company is required to have at least one director and also states that a company must have at least one director who is an actual individual, and not simply a corporate vehicle. Furthermore, the structure of the company will set out the quorum for board meetings and the like, which will usually specify that a company must have at least one director to hold a quorate meeting. This should always be checked as it is common for the minimum to be set at a higher number.
How long does a company stay on Companies House for?
The length of time a company’s information is stored on Companies House depends on a few different factors. As long as the business is active then all the information about it will remain on the public registers, but if it becomes dissolved then after 6 months from dissolution the Company’s name will be taken off from the register. Having said that certain records of dissolved Companies remains on the public register for 20 years. After 20 years, a selection of dissolved company records are transferred to The National Archives (TNA).
How do I remove a shareholder from a limited company?
If your Company is established in the UK then you can freely change its shareholders at any time, if all parties are happy with the decision. Though, be aware that certain documents must still be submitted to ensure that the removal is done in a legal and official way and that any new shareholders appointed are also appointed officially. It is always important to take advice.
There are many reasons why you may want to remove a shareholder from a UK-based limited company. Shareholders can also choose to leave their respective company whenever they like and for a reason that suits them. It may be that they are experiencing financial issues or that they have simply decided to reinvest their cash elsewhere.
Whatever the reason is, their shares must be transferred through gift or sale to another person or company, as it is not possible to simply delete shares from a business.
The new shareholder information must be recorded in the company’s register of members. Your company must also notify Companies House of the change. This can be done via submitting the annual Confirmation Statement.
Those shares that now need to be gifted or sold to other individuals, can be done so using a Stock Transfer Form. The filling in of this form will be overseen by the company director, and upon completion, the ownership will have officially been transferred. Therefore, a share certificate must be given to the new shareholder(s) and if necessary, they will need to pay the purchase price to the previous owner, whom they’re taking the ownership of the shares from.
If you are considering resigning as the director of your limited company or would like us to advice on any matters relating to company turnaround or insolvency, then please feel free to call us.
Next steps
If you want to find out anything further about this topic then please feel free to call me on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email me vee@navigatebr.com
This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.
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