Can i resign as Director and start new company of my own?

MIIPFL · Dec 13, 2009

Can you please help with the legal standing on this one.
Our company has been trading as a Private Ltd Company since 1986 with and MD who owns 99% shareholding, a director/secretary who holds 1% shareholding and my self - a Director with no shareholding.
Both Directors want to resign their posts and hand in notice of employment due to the way the company is being run by the 99% shareholder. Obviously i understand the Ltd Company have to name a further director/Secretary if we do this but the main question is - CAN WE START OUR OWN COMPANY LEGALLY, in competition with our old company. We have run our current company on our own with little input from our MD and certainly no reward so we think its time to GO ALONE.
I personally have a very simple contract that is out of date and not renewed when i became a director and still has my old salary and title of sales manager and all it states is one months notice. It is also unsigned by the employer.My fellow director who is secretary with 1% shareholding has no contract as she didnt sign it as she didnt agree with the content many years ago.
Is there any law that he can stop us from trading or sue us as current directors.
Thank You
PFL

sysconfig · Dec 13, 2009

You can be director, shareholder, and/or secretary in as many companies as you want, as long as none of the companies compete and none of your contracts exclude competition (the right legal term for that was mentioned in previous discussions, just can't remember :|).

However, you shouldn't "steal" customers. That can get dirty otherwise...
The legal experts here can certainly explain that better.

Also, the MD of your current company doesn't need to appoint a second director or secretary any more. Private Limited Companies used to need two officials, but that's history. The Companies Act 2006 has removed that requirement, effective October last year, if I'm not mistaken.

oldeagleeye · Dec 14, 2009

Agree with Syscon. When it comes to poaching customers however there is somewhat a bit of a farce when in advertising a position for a say a solicitor or accountant many adverts state ' must have good following '.

In other words bring you client base with you or don't bother applying. Charming ain't it.

MIIPFL · Dec 14, 2009

Thanks for your reply - but when you say - you cant steal customers - thats like saying - you cant talk to any customers that you have spoken to for 20 years. We supply the whole of the UK and cover every blade of grass - so if we dont contact previous customers - we dont trade. Yes we expect a fight from our MD but wanted to know legally where we stand when we do this, if anyone knows. Our MD does nothing on the sales - he is simply a financial guy and has no idea of sales etc. The two directors that are leaving have made the contacts and unfortunatley in life - people buy from people not companies. We have a niche market and are one of about 3 companies in the UK in our business - so not approaching the same customers will be impossible.

Williams lester · Dec 14, 2009

You will be in breach of your fiduciary duties as a director, try googling Fassihi -v- Item Software (UK) Ltd case...it may give you a few pointers of what happens to Directors who try this.

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Can i resign as Director and start new company of my own?

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