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Director Resignation

Comments

  • #2
    TheCostumeShop.ie: Ronan
    Company Representative Posts: 1,740 ✭✭✭TheCostumeShop.ie: Ronan


    Yes it's called voluntary liquidation, a business with no directors would no longer be trading.


  • #3
    CoDirector
    Closed Accounts Posts: 3 ✭CoDirector


    Thanks for reply,

    I don't want to actually liqiudate the company, I want to force the shareholders in appointing a new board. If the board resigns is it not incumbant on the shareholders to to form a new board?


  • #4
    HellFireClub
    Closed Accounts Posts: 3,912 ✭✭✭HellFireClub


    CoDirector wrote: »
    Thanks for reply,

    I don't want to actually liqiudate the company, I want to force the shareholders in appointing a new board. If the board resigns is it not incumbant on the shareholders to to form a new board?

    As far as I know, a director can resign at any time or by giving a certain period of notice (usually set out in the Articles or Memorandium of Association that was the basis for the formation of the company).

    In Ireland, it is very normal in small businesses for directors to be shareholders. It is the responsibility of shareholders to vote for directors to run the company. You can have multiple shareholders or in the case of a single member company, 100% of the share capital is held by one person (the single member, also known as the sole shareholder). When you are dealing with a sole shareholder/single member set up, obviously there is no need for a vote, as one person who owns the full issued share capital of the company appoints directors in line with the Articles & Memorandium of Assocation...

    In the case of multiple shareholders, the procedure for calling an EGM (Extraordinary General Meeting), which would obviously be necessitated by a masse resignation of the board of directors, is set down in the Articles & Memorandium of Assocation.

    The procedure for resigning as a director is also set out in the Articles & Memorandium of Assocation, notice required, etc...


  • #5
    CoDirector
    Closed Accounts Posts: 3 ✭CoDirector


    Thanks HellFireClub,

    In my situation I have

    1 Directors who are shareholders
    2 Shareholders who are not directors
    3 Direcors who are not shareholders

    Complcated I know but I think your premise still stands, once everyone has resigned it is then the responsibility of the shareholders to appoint a new board.

    Thanks again


  • #6
    HellFireClub
    Closed Accounts Posts: 3,912 ✭✭✭HellFireClub


    CoDirector wrote: »
    Thanks HellFireClub,

    In my situation I have

    1 Directors who are shareholders
    2 Shareholders who are not directors
    3 Direcors who are not shareholders

    Complcated I know but I think your premise still stands, once everyone has resigned it is then the responsibility of the shareholders to appoint a new board.

    Thanks again

    As far as I can work out OP, and I only have a working knowledge of this area due to my own self employment/MD position over the years...

    You can split your situation down into two groups of folks with different responsibilities:

    Your group (3), folks who are non shareholding directors. These folks can more or less walk away and resign, once they so in accordance with the rules set out at the formation of the company. When I say they can walk away and resign, this is obviously taking into the account the provisions of the Companies Act, insofar as they could be pursued in the future if they have been involved in fraudulent trading activity within the business, etc...

    Then the other two groups (1) and (2), as far as I can work out, these folks have an obligation to call an EGM for the purposes of convening a few board of directors. What you need to focus on is that an EGM is a meeting of members, also known as shareholders. If the members/shareholders, wish to resign (or place themselves up for re-election), to the board of directors, this is of course open to them. But an EGM is about shareholders (who are still formally associated with the company by virtue of their shareholding), electing a new board of directors.

    What seems to have happened in your case is that everyone has tried to more or less walk away. Those that are not shareholders probably just have to resign in writing. Those that are still shareholders still have to elect a new board of directors or decide what they are doing with the company, taking into account their obligations under the provisions of the Companies Act.

    Hope it helps, you might get a better answer over in the Legal forum...


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