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Can a Sole Director Resign from a Company

Discussion in 'Legal' started by cajola, May 12, 2011.

  1. cajola

    cajola UKBF Newcomer Free Member

    Posts: 1 Likes: 0
    A friend of mine is the sole director and only employee of a limited company which is going to be dissolved by Companies House in 3 month's time, for not filing accounts.

    The company is not trading, as it is insolvent, (has no money) and as the only employee of the company, he is also not earning any money, and the company in fact owes him loads of money as an employee, and he is the company's biggest creditor.

    Questions are:

    As the Sole Director, can he resign?

    As an employee, should he be given a redundancy notice from the company to be able to claim entitlement to benefits?

    Any advice appreciated.
  2. jules12345

    jules12345 UKBF Contributor Free Member

    Posts: 1,073 Likes: 119
    Whatever happens the director will be tarred and feathered with the bankruptcy...!
  3. kulture

    kulture UKBF Regular Moderator

    Posts: 6,297 Likes: 1,728
    Why are your posts so often misleading or potentially worrying?

    The company has the debts, not the director.

    If he resigns as director, the shareholders (presumably him) will have to appoint a new director. Why bother resigning? The directorship will terminate soon enough.

    Benefits are an entitlement if you are not earning enough or not employed. Check with the local benefits office, but I suggest that if the company is no longer trading, it is no longer employing. To be entitled to jobseekers you need the able to look for a job and take one if offered. I am sure that as the company is not trading, you are available for work.

    The entitlement to benefits has nothing to do with being a director.
  4. jules12345

    jules12345 UKBF Contributor Free Member

    Posts: 1,073 Likes: 119
    Sorry Op - point taken Kulture it should have read

    Whatever happens with insolvency, the director will be tarred and feathered with a bankruptcy...!
  5. David Griffiths

    David Griffiths UKBF Regular Moderator

    Posts: 9,951 Likes: 3,159
    That's not much better. The company is to be dissolved because it hasn't filed accounts, not because it is insolvent. That happens all the time and there would be no adverse affects on the director's personal record.
  6. Charlie B ACS

    Charlie B ACS UKBF Regular Free Member

    Posts: 806 Likes: 205
    Bankruptcy???

    Bankruptcy only a applies to a person, not to a Directorship!
    Last edited: May 13, 2011