How to Resign as a Director of a Limited Company

Resigning as a director of a limited company is a formal process that must be handled correctly to protect your legal position and ensure that Companies House and HMRC are notified. Whether you are stepping away due to retirement, a change in role, personal reasons or a company dispute, it is important to follow the correct steps and understand your responsibilities before and after resignation.

This guide explains how to resign as a director, what notice is required, how to notify Companies House and what happens to your liabilities after you leave.

Do you need to give notice?

Check the company’s articles of association or any director service agreement to see whether a formal notice period applies. In most small companies, a written resignation letter addressed to the board or company secretary is sufficient. However, where a contract exists, it may require a specific notice period or written form of resignation.

If there is no formal agreement, you can generally resign at any time by notifying the company in writing. It is good practice to keep a copy of your resignation letter and ask for written confirmation of receipt.

How to write a resignation letter

Your resignation letter should be clear and professional. It must state your intention to resign as a director and include the effective date of resignation. You do not need to explain your reasons, although you may choose to include a brief note of thanks or context. If you are also resigning as an employee or shareholder, these roles should be addressed separately.

For example:

I hereby resign as director of [Company Name], effective from [Date]. Please update the company’s records and notify Companies House accordingly.

Keep a copy for your records and ensure it is received by the appropriate person, usually the company secretary, another director or the board as a whole.

Who is responsible for notifying Companies House?

The company is responsible for informing Companies House of your resignation by filing form TM01. This must be submitted within 14 days of the resignation taking effect. The form can be filed online or by post.

You do not need to notify Companies House yourself as a departing director, but it is wise to check the public register a few weeks later to ensure the update has been made. If the company fails to file the form, you may still appear as an active director even after leaving.

What happens to your shares?

Resigning as a director does not automatically mean you give up your shareholding. If you hold shares in the company and wish to transfer or sell them as part of your departure, this must be handled separately, usually through a stock transfer form and board approval. Review any shareholder agreements or company rules regarding the sale or transfer of shares.

Are you still liable for anything after you resign?

You are no longer responsible for the running of the company once your resignation takes effect, but you may still be held liable for decisions made while you were a director. This includes issues such as wrongful trading, fraudulent activity or breaches of duty that occurred during your time in office.

To avoid problems later, ensure that any handovers are documented properly and that you leave behind any necessary records, keys, passwords or company equipment.

Can you resign if you are the only director?

If you are the sole director of the company, you cannot simply resign and leave the company without leadership. Companies House will reject the resignation unless another director has been appointed. You will need to appoint a replacement before stepping down or arrange for the company to be closed.

In cases where the company is no longer active, you may wish to apply for voluntary strike-off or consider appointing a professional to assist with winding up the business.

Final steps after resignation

Once your resignation has been accepted and Companies House has updated its records, make sure your details are also removed from other places such as the company website, email systems and marketing materials. If you had access to business bank accounts or credit cards, these should also be reviewed and updated.

It is also worth notifying HMRC if you were registered as an employer or were involved in the company’s payroll scheme, especially if you were handling tax submissions.

Final thoughts

Resigning as a director of a limited company is a straightforward process if handled properly. A formal resignation letter, proper internal notice and timely filing of the TM01 form will ensure your departure is legally recorded and that you are no longer listed as a company officer.

If your resignation is part of a wider business transition or dispute, it may be wise to seek advice from an accountant or solicitor to protect your interests and clarify your responsibilities. A smooth and professional resignation helps both you and the company move forward without complication.