Director Wishing To Leave

[thefoxuk]

I have spoken to a solicitor and a Director from a HR company. They have given me the same advice but both suggested I post on here and ask the question.

I am sorry it is long but the background information will make the questions cleare.

I am a director of two companies in company A I am just a director and employee. In company B I am a Director, Secretary and 50% shareholder. I was working on a project in company B for Company A. This project was taken up all my time so it was suggested that I take a position in company A and move my customers over. I did that last May, however since then I have found that Shareholders have begun to bully and intimidate me.

Back in December after an abusive meeting, I came back in on the Monday with a resignation letter. I was told that I wasn't allowed to resigned and that my resignation was refused. I was also told that he would sue me as the company had invested money into this project and that I would be liable for costs. He also told me that as I director under the new companies rule if I left my role without finding a replacement I would be sue for that too. In the end I felt I had no choice but too retract my resignation.

Since then the project has come to an end. I have no staff left as they moved on. Which just leaves me in my dept, I have a contractor to help me and a ex member of staff who does contract work.

I have no contracts either an employment or directors contract. I have checked the Articles of Association etc. There is nothing in there that states that I can't resign.

So my questions are:

1. Can I be sued for resigning my role as a director if it would leave them with no staff in there IT dept for a short while?

2. Is there anything else that I may need to be aware of?

[dsigner]

Others will tackle the legal angle. I think it is very simple. Of course you can resign.

The real thing to think through is: What happens afterwards. I presume that you will then be relying on Company B for your gainful employment. If the contract involving both parties was not just a one off then you could find the relationship between the two companies make it difficult.

[thefoxuk]

I am going to close company B, it is not worth anything and I am not concerned about the assets. I have 4 Job interviews this week, they are better paid with less responsibility. I just want to enjoy working again and not fear coming to work.

[wecandobiz]

Are you a company director with Companies House with Company A, or you just have the word "director" in your job title?

IH

[Lime One]

You should take advice from a specialist employment lawyer who deals with private individuals who can consider your case. The circumstances of being bullied into working under threat of litigation would indicate a potential claim, note I say potential only, this is too complex to get meaningful advice in a forum.

[M-C Hoare]

In respect of the resignation as a director and any liability if this adversly affects the business, the Court of Appeal have approved the following statement of the law as given in the case of Hunter Kane Limited v. WAtkinss [2002] EWHC 186 (Ch) (unreported, 24 January 2003):-

"3. A director's power to resign from office is not a fiduciary power. He is entitled to resign even if his resignation might have a disastrous effect on the business or reputation of the Company.4. A fiduciary relationship does not continue after the determination of the relationship which gives rise to it. After the relationship is determined the director is in general not under the continuing obligations which are the feature of the fiduciary relationship."

You may need to be careful if you are planning to take any work with you from Companny A as in that case they also stated:

"2. A requirement to avoid a conflict of duty and self-interest means that a director is precluded from obtaining for himself, either secretly or without the informed approval of the Company, any property or business advantage either belonging to the Company or for which it has been negotiating, especially where the director or officer is a participant in the negotiations."

Hope this helps.
Marie

[thefoxuk]

I am a director with Companies House.

I also have a couple of customers that I would like to take with me to work with on a self employed basis. However, if that is going to open me up to any legal action I will perhaps need to negotiate this with the company before I go.

[dsigner]

I am a director with Companies House.

I also have a couple of customers that I would like to take with me to work with on a self employed basis. However, if that is going to open me up to any legal action I will perhaps need to negotiate this with the company before I go.

The best way of thinking this through is :
Make sure that you have plenty of clear water