Director’s resignation letter

If you want a resigning director to also acknowledge that they have no claims against the company related to their office or its termination, you can ask them to submit our letter.

Director’s resignation

Where a director indicates that they want to resign from their office, they’ll need to submit a resignation letter. Our Director’s Resignation Letter can be supplied to them for this purpose. Subject to anything to the contrary in the company’s articles of association, a director can resign from office at any time and no period of notice is required. Our letter assumes the company’s articles don’t impose any special formalities relating to a director’s resignation but do first check what the articles say. Our letter starts by setting out the director’s resignation from their office and whether it’s to be with immediate effect or on notice - you might want to discuss timing here so as to, for example, enable the resigning director to participate in a board meeting to appoint their successor. Following receipt of the resignation, you’ll need to file form TM01 (termination of appointment of director) with Companies House within 14 days, so our letter mentions that filing requirement. The director’s role as an officer of the company is entirely separate and distinct from any role they may also have as an employee. In many cases, directors will also be employees and so they will enjoy both statutory and contractual employment rights as an employee. If the director intends to resign both as a director and as an employee, it’s best to deal with the employment side of matters through a separate resignation letter in the normal way. They can write that letter themselves. You may also want to consider a Settlement Agreement if there are any problems surrounding their resignation, or they have potential employed-related claims against the company.

Acknowledgement and waiver of claims

The remainder of our letter relates to the director providing an acknowledgement and waiver of claims. We’ve drafted this acknowledgement and waiver widely to provide that the director releases any claims or rights of action against the company or its officers or employees arising out of their office or its termination. This should help to ensure that you’re not at risk of a compensation claim being brought by the director related to their office or its termination. You don’t have to insist on this type of acknowledgement and waiver though, so if you’d rather not do so, the director can submit a much simpler letter resigning from their office. Finally, as the waiver encompasses claims for payments arising from the directorship, if the director is owed directors’ fees or expenses for the month in which their resignation takes effect, you’ll need to ensure those monies are either paid beforehand or are expressly carved out of the waiver.

Execution

As our letter includes a waiver of claims by the resigning director, it’s advisable that it be executed as a deed. This means the director shouldn’t just sign the letter. Instead, it needs to be clear on the face of the letter that it’s intended to be a deed and they should sign it in the presence of a witness who then attests their signature. If they don’t execute it as a deed, there’s a risk that issues could later be raised as to whether you’ve given the director any “consideration” (i.e. something of value to which they’re not already entitled, such as an additional monetary payment) in exchange for their waiver.