Directorships & Company law

swanvill

Hi,

My understanding is that every company must have two directors.

Can both existing directors resign before there are two replacement directors are elected?

If they can resign before being replaced and no one else is elected as directors, will the company and/ or former directors be breaking company law?

To give a bit of background there was a management company formed (ltd by Guarantee) with directors & nine original members from the Developers company. Now the residents of the estate will be forced to become members of the company & directors now wish to walk away from the company. I'm guessing no residents of the estate who are forced into membership, due to contract of sale, will want to become directors, as the company/estate in is a mess.

Thanking you in advance for your anticpated help. BTW we will be getting legal advice but I would be curious to see boards opinion.

Sean.

hinault

swanvill wrote: »

Hi,

My understanding is that every company must have two directors.

Can both existing directors resign before there are two replacement directors are elected?

If they can resign before being replaced and no one else is elected as directors, will the company and/ or former directors be breaking company law?

Directors can resign from the company and are not obliged to stay in office until the company elects replacement directors.
edit : there is nothing in law obliging them to remain in office until replacement directors are found and elected to the Board.


If a company doesn't have the required number of directors it has to be dissolved by law.
Otherwise it is breaking the law. Company secretary is obliged to notify the statutory authorities that the company doesn't exist any longer.

smcgiff

Re Hinault's post above...

I thought the CRO would not allow the Director membership to fall below 2 Directors? I thought the procedure in that case was for the last two directors remaining to write to the CRO stating they wish to be removed.

The CRO would keep this on file but would not replace them until two more were appointed.

katie_elder

Smcgiff is correct. The CRO will not register the details of the two directors resigning until replacement directors have been appointed. This is a common problem with property management companies as the residents usually want nothing to do with the company.