By Sinead Floody. 12th January 2017
”I am listed as a director of a company I am no longer involved in – How can I properly resign as a company director?” This is a question that we get asked by clients from time to time. Director resignations are sometimes a simple matter of filing a couple of forms, but other times it is not so straightforward. It’s an important question, as being a director of a company carries a lot of legal responsibility.
So what is the procedure to resign?
If a director of an Irish company wishes to resign from his/her position on the board, the director must send a director resignation letter to the company, notifying the company of his/her intention to resign. Sometimes the company will prepare this letter and include a clause stating that the director has no past and present claims against the company. The company must then make the required filings with the Companies Registration Office (CRO) within 14 days of the letter of resignation. It is important to note that all companies, with the exception of the Private Limited Company (LTD) model, must have a minimum of two directors at any given time. The LTD company can have just one director, which must be a separate person to that of the secretary (can be a person or company). It is not uncommon for the company’s constitution to state that individuals can resign as a company director by presenting his/her resignation in writing to the company.
What should I do if the company has failed to file my Director Resignation with the CRO?
Section 152 of the Companies Act 2014 states that if the company fails to make the necessary filings with the CRO to give effect to the resignation of the director, the director can serve notice on the company requesting the company to resign him/her from office. This notice gives the company 21 days to file the required forms for the resignation. If the company still does not file the required forms with the CRO, the director can apply to the CRO themselves; submitting proof of the letter of resignation (Letter A) and the notice of request for removal (Letter B) along with the required statutory forms, to forcibly remove themselves from the company. This is considered a method of “last resort” and also applies to a person who wishes to resign from the office of company secretary.
The Importance of Updating the CRO Register
Section 227 and 228 of the Companies Act 2014 state that directors of Irish companies have serious duties and responsibilities that they owe to the company while appointed as a director. It is for this reason that it is imperative that the CRO’s register is updated when a director resigns. The resigning director must make sure that this has been done in accordance with the Companies Act 2014 by the steps laid out above.
Company Bureau can assist with director resignations, please company our Contact Form and a member of our Company Secretarial department will be delighted to assist.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.