Director liabilities post-resignation

[PMLL]

I was a co-director of a Ltd Co until June 2012, when I resigned using TM01 which has been registered and logged as required at Companies House.

My co-director (now sole director) is claiming I still need to resign to him, as and such is refusing to remove my name and home address from the company bank account. As there have been no employee contracts, verbal or otherwise, no employee renumeration (small sums of money were taken as dividends as equal shareholders), no NIC or PAYE etc., I believe there is no employment to resign from, and there were no employees of the company. (The company consisted of myself and one other 50/50 director.) Am I correct?

The company was solvent when I resigned and a set of management accounts were drawn up and approved by the company accountants prior to my resignation, with finances set aside for the previous year's corporation tax, the current year's corporation tax and any VAT due. I am concerned that the now sole director is using those monies to run the company, purposely running the company down, or into debt.My fear is that when the taxes/VAT are due, there will not be sufficient funds to cover them. Am I in any way liable for these, despite ensuring money was set aside for them correctly upon my resignation?

My questions are simply:

- Should I have written a resignation letter to the remaining director, despite not being an employee and having lodged the correct forms at Companies House (and informing him of such.)

- Am I liable for any company debt acquired since my trsignation, or liable for the way he is running the company (into the ground) beyond my resignation?

Many thanks.

 

[Deleted member 138423]

I always write the same thing in these circumstances, so not wishing to change tact, have you asked your accountant?

 

[teddys]

Many small businesses do get confused with the role played by the companies house.The formal process for resigning is to submit the resignation (addressed and sent to the registered office) to the Board of directors (i.e yourself and the other director). The Board accepts it at a meeting and changes are made to the register of directors. This change is then communicated to the Companies House, which is where the public register is maintained. Filing the form with the companies house is a compliance that the company needs to fulfil. In other words a director doesn't send his resignation letter to the Companies House! In that sense the other director is correct. However, once you have resigned as a director your liabilities as a director are over.

 

[mhall]

But as a Director you will not be liable for any of the company debts unless the company has done something illegal.


I would be tempted to make sure all your customers know you have resigned and also send a note to your other Director confirming your resignation, (as opposed to resigning) and showing concern that he has not taken action - in reality I would doubt your company ever had "official minuted meetings" where your original resignation would have been discussed, so it would be your word against his whether you resigned or not on the date concerned.

It may be worth checking your Articles of Association - in one of ours I can resign by sending a text message or verbally by telephone !

 

[shakeandbake]

I am actually in a similar position and some advice would be most welcome.

In Feb of 2012 i resigned as a director of a company (no shareholding) as the company was being run in a manner that i disagreed with. I made it quite clear to our accountant at the time and the other director and shareholders i would play no part in a company effectively running insolvent even though the company was being bank rolled on occasion by the other directors partner.

In short it was a situation i wanted nothing more to do with.

Anyhow although I resigned my concern is since that point they have done nothing with the company and just ignored any correspondence and letters from various creditors until such time they wish to make a decision on what they want to do, even though i was told they intended to pay off the debt of and use the company in the future.

My question is really, is there any come back on me? Im sure many creditors will be after them including HMRC but i now have no authority to do anything about it. At what point can i realistically assume there will be no come back on me? Its been 7 months now and even though i have contacted them and outlined they need to get it sorted they are just ignoring my emails and phone calls.

Is there anything I can do from my end to ensure i cover my back?

 

[StevensOnln1]

Have you checked that your resignation was filed with Companies House? Unless you gave any personal guarantees, you cannot be held liable after you have resigned as a director.

 

[shakeandbake]

Yes everything was filed at companies house by my accountant so i have followed the correct proceedure.

My main concern is in respect to the debts amassed prior to my resignation can i be held accountable to any of this in retrospect later down the line?

I just want to make sure at least from my side of things i have acted correctly.

Also what will happen to the company assuming they have indeed effectively done a runner? I guess the trouble is i have no way of finding out and im concerned just resigning isnt the end of it.

Surely its not as simple as a director resigning walking away and leaving it with the other party, not that i have done that but thats how it might be percieved. Is there a timesale or period of time until such point there is no responsibility held my side?

Many thanks for your help.

 

[StevensOnln1]

Unless you gave any personal guarantees, then any debts belong to the company, not you. You can still be held liable if you acted illegal whilst in your post as director, but you cannot be held responsible for anything that happens after you resign.