Contents

  1. 1. How do I resign as a company director?

Director Resignation Letter Template

July 7, 2021All good things must come to an end, and you've decided that you want to resign as a company director. Maybe you have a new job, have decided to retire, or maybe the role just isn't the right fit anymore. Whatever the reason, you've decided to part ways and give up your role as an executive director of a limited company.Now that you've made your decision, you'll need need to think about what next steps to take. After all, you can't just walk out the door at 5.30pm on a Friday and not turn up on Monday! There are legal steps that a company has to take when a director resigns (especially if there is only one) and common courtesy dictates that you give the company some form of notice.A formal resignation letter is an easy, fuss-free way of getting your affairs in order. It will allow you and the company to part on good terms and move forward to the next stage in your respective lives.When you resign as a director, there's more to consider than just your leaving date and what to do on your last day. There are legal implications for the company you're leaving to think about, so it's helpful to have a plan of action set down before you hand in your notice of resignation.

How do I resign as a company director?

If you have decided that you want to resign as a director from a limited company, you'll need to formally notify the company. This will give the company appropriate notice and allow them to start the process of appointing a new director. A simple way to formally notify a company of your intention to resign is to write a director resignation letter. Even if the company culture is relatively informal, it's best to send a letter so that the company has a formal document registering your resignation.Chances are that you've written letters of resignation in the past, leaving old jobs, but have never had to write a resignation letter as a company director before. If you don't know what to include, then your departure could end up being confused and messy, which isn't the final impression you want to leave. Luckily, we've created a simple step-by-step guide on how to write a director resignation letter, with everything you should include and tips on how to write it. We've also created a handy resignation letter template for you to download and use to make the whole process faster and as stress-free as possible.

Check your company policy

Before you put pen to paper and start to write your resignation letter, the first thing you should do is check your company policy. If you have a director's service contract, now is the time to give it a read through in case there are any details about how you should offer your resignation. It's also a good idea to check the company's articles of association for any information about directors who choose to leave the company.When you go through all these documents, check for the following:
    Are there specific procedures you have to follow?Does the company require a particular format for your resignation?Who do you have to notify? As well as the company, do you need to alert any board members or a board of directors? Any clients or customers?Is there a notice period?Is there any handover specifically required by the company?
Even if all these things aren't set out in your company's documents, it's still a good idea to consider them. If you're a company director, it's likely that you've been there a long time and have a lot of deep and valuable knowledge about the company. Offering to share this knowledge, rather than take it away with you, shows that you care about the continued success of the company, even if you're no longer a controlling part of it.Even if there's no required notice period, giving a date and time for the company to adjust and find someone new means they won't be scrabbling around in a panic to find a replacement. Give them time to digest the news and start the process of hiring a new director. Obviously, you want to move on with your life and don't want to be kept hanging on for too long while the company sorts its affairs, but giving at least a few weeks' notice will ensure that the company still has a steady hand directing the ship.Legally, there's no requirement for you to inform the business formally in writing that you're resigning, but it ensures a smooth transition for you and the company, so we'd advise it as the best policy.However, just because there's no legal reason for you to send a resignation letter, that doesn't mean that there are no legal implications to consider when a director leaves a company.When a director leaves a company, the business has to file a TM01 form with companies house. You can do this online or by post. The following information must be included when submitting the form:
    The company details including the full name and registration number.The director's details as they appear on the register.The date that their resignation becomes effective (resignation date).
Sending off this form will update the company register. If you are the only director of the company, then a new one must be appointed at the same time, it's part of the requirements of the Companies Act 2006. Failure to do so means the company could be struck off by Companies House.Any private limited company (PLC) in the UK has to have at least one director. They must be over 16 and have to provide a correspondence address which will be available to the public via Companies House. However, if this is a home address (and are understandably wary of it being publicly available), they can apply to  Companies House, and ask them to remove it from the register unless it is the company's registered office address.The company will also need to update their own registers, detailing your resignation and the appointment of any new directors.If a company secretary is resigning, then the company will need to file a TM02 form.

How do you write a director resignation letter?

If you've never written any kind of resignation letter before, then you may be unsure of what to include, how long it should be or even how formal you need to make it. In the following guide, we'll walk you through everything you need to know.Even though resigning as a director is a big decision, writing a director resignation letter is actually a pretty simple process. As long as you include the basic elements of when you plan to resign and why you're leaving, then you're pretty much there. In our guide, we'll also help you write a resignation letter that sounds like it comes from you, an actual human and not a robot. After all, you've served the company well for some time, and you'll want to leave on a high! 

Can I send an email?

You can send an email informing the company of your resignation if you prefer. However, a formal letter draws a neat line under your tenure as a company director and allows the company to keep a hard copy record of your notice to resign.If you want to hand your letter over to someone in the office, that's fine. If you decide to send the letter by post, then it's sensible to send it using recorded delivery, so that there's less chance of it going awry. You should also be sure to send the letter to the company's registered address.

What to include in your resignation letter

There are a few things that are must-haves when it comes to writing a director resignation letter. We've included them in our free template as well, but we'll run through them with you if you want to write your own resignation letter from scratch.

Address the company, not an individual

If you've written a letter of resignation before, when leaving a job, then you probably addressed it to your manager. When you resign from the company as a director, there will be more people involved in this process.If there are other directors at the company, you can address the letter to them. If you're the only director, then this letter needs to be issued to the company itself.

Your intention to resign

Now we get to the main news; your intention to resign. There's no need to pad it out with unnecessary waffle – keep it short and straight to the point.

Explain why you're resigning

You don't have to give a reason why you're resigning, but people will be curious and giving a reason will stop others from speculating. If you're pursuing a new opportunity, your colleagues will likely be excited for you, so there's no reason not to share the happy news.If you're leaving to focus on your physical or mental health, you may feel hesitant about sharing something so personal with people you work with. You might consider this to be a good time to talk about tackling the stigma around putting your health first or talking about mental health in the workplace, but there is no pressure for you to do so. Whatever the reason, you don't need to share your medical notes –  just saying you're taking time out for personal reasons is fine.Remember, you still need to be professional in this letter. Therefore, this is not the time to air old grievances or bad-mouth people. Even if you're leaving because you've had difficulties with a colleague or disagree with the direction the company is going in, it's better to avoid airing your dirty laundry in public. Keep it professional.The key here is to keep it brief. It's fine to say why you're resigning, but you don't need to go into detail.

Resignation date

This is the key information that the company will need to know, especially if you are the sole director of the company: when your final date of employment will be.If you are the only director of the company then, legally, they will need to have a new director appointed by the date you leave.By giving notice, you will also give the company enough time to process the news and ensure that you have time to hand over any important information to your colleagues and successors.Remember to check any legal documents, such as contracts or articles of association, in case there is a specific notice period you need to give. For a little extra reassurance, you can ask the company or the remaining directors to confirm that they have received your letter of resignation and agree with your resignation date to make sure that everyone is clear on the time and date you are leaving.

Keep it concise

Your director resignation letter only needs to be a few paragraphs long. There's no need to fill out reams of paper with flowery language. All you need to provide is the relevant information so that the company can start the process of appointing a new director (if needed), and maybe plan your leaving party!

Be professional, but human

While this letter should be short, to the point, and professional, it doesn't need to read as though it was written by a soulless corporate robot. Why not thank the company, or say how much you've learned during your time as a director, or say how much you've enjoyed working with them over the years?

I've resigned as a director. Can I still work for the business?

Yes, if you resign as a director of a company, you can still work there as an employee. However, you may need to sign a new contract, and obviously, your responsibilities will be very different.

Can I keep my shares in the company if I resign as a director?

Yes, but check your company's articles of association or shareholders agreement. Sometimes, the articles of association will state that a director who has left the company will have to transfer or sell their shares.

What are my responsibilities to the company after resigning as a director?

When you resign as a company director, you're no longer responsible for the management of the company. However, there are still some liabilities to be aware of.If there is an investigation into issues that arose while you were a director, you could still be held liable.If you have signed any personal guarantees for any debts, loans or credit cards for the company, these won't just disappear after you resign. Make sure you have any financial details tied up before you resign as a director of the company.After resigning, your name won't just disappear from the company records. Companies House will still show that you were a director at the company, but it will list you as "resigned".The following details will be included on Companies House:
    The correspondence addressMonth and year of the director's date of birthThe director's former roleThe dates that the director held their officeThe director's nationality and country of residenceThe director's occupation
Even after the company dissolves, information about the officers of a company remains available for 20 years. If you really want to remove your details from the company, you can write to Companies House and ask them to remove you.

Summary

As a resigning director, writing a resignation letter represents one of the biggest decisions you'll make in your working life. Using our free template and step-by-step guide, the whole process can be easy and stress-free, leaving you free to focus on your exciting future.
Daniel Hogan
Daniel HoganCOO & Co-Founder

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Director Resignation Letter Template

Stepping down as a company director? Download our free director resignation letter template to give your limited company official notice of your decision to resign.

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