What To Include In A Director Resignation Letter

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What To Include In A Director Resignation Letter

There are a variety of reasons which lead to a director’s resignation:

  • Unexpected illness comes up
  • Interests change over time
  • You may be ready to retire
  • The company may be headed in a different direction

Whatever the case, a director resignation letter is necessary when the time comes.

While a letter is a necessary step in resigning, it should only be done after a comprehensive review of your contract. With the help of a legal consultant, one should review all company contracts and agreements (such as Employment Contracts, Director’s Service Agreements, and the company’s Articles of Association). Special attention should be given to specific company policies regarding resignation. This is vital to the process of resignation as a director to avoid a breach of contract.

A director resignation letter is similar to any other letter of resignation in some ways. It should include a thank you to the company for the opportunities you have been provided, a brief explanation regarding the decision to resign, the date resignation takes effect and a statement of good luck to the company in the future.

Additionally, if the director is also a shareholder of the company, the letter of resignation as a director should also include an explanation of shares. For a director who no longer wishes to be actively involved in the company, shares can be transferred by filling out a J30 Stock Transfer Form.

When a director resigns, it is required by UK law that Companies House is notified of the change by filling out the TM01 Forms. While it is the responsibility of the company to fill out the necessary paperwork and not that of the former director, it does not hurt to mention the procedure in the letter of resignation as well to make sure all bases are covered in the transition.

Throughout the process of drafting your director resignation letter, it is important to seek out legal advice as opposed to going it alone. Though it may seem easy to follow an online template in drafting your letter of resignation, avoid the temptation! From the outside, it appears to be a quick and convenient solution. Most templates online are free to use with blanks to fill in, but these templates could lead to unintended consequences in the future.

Since every company is different, there is no single online template that is comprehensive enough for an individual’s situation. It is imperative to seek legal advice regarding your letter of resignation to avoid a breach of contract, letter before action, or costly court fees further on.

As a resigning director, it is important to be direct, clear, and in compliance with contractual obligations when drafting your director resignation letter. This will ensure a clean, amicable, and complete break from a company so that you can start your next adventure in life.

If you need information or require quality legal advice, please get in touch with us today via a free Startup Legal Session. Book below and get free legal advice from an expert who can best advise on your specific legal matter.

director resignation letter

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