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F E Smith
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Category: Law
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Experience:  I have been practising for 30 years.
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The question is regarding a director leaving a company. Said

Resolved Question:

Hi,The question is regarding a director leaving a company.Said director has handed in his resignation with immediate effect. There will be a dispute at some stage regarding conduct of the partnership.However, my question to you is.Can i remove his email, bank, access privileges with immediate effect? I want to contact any supplier, customer etc who has him on their records and ask them to remove.As i do the above i will be notifying him by email. How best to word this?Lastly i believe the accountant is a friend of said director. How can i ask him to declare any interests he may have otherwise?Shaid
Submitted: 9 months ago.
Category: Law
Expert:  F E Smith replied 9 months ago.

Was this a limited company or a partnership? You refer to the limited company but then referred to a partnership. I need to know which it is.

You presumably have the resignation in writing, when is he leaving? How much notice does he have to give?

Can you please explain the problem or potential problem with the accountant? Thanks

Customer: replied 9 months ago.
Hi,It is a limited company with three partners. Said director has resigned from being director yet wishes to remain 1/3 shareholder unless we offer to buy him out.He gave no notice. Just emailed 'with immediate' effect.The accountant i believe is a friend of his. I have no proof other than suspicion however the accountant has only been liasing with said director and no said director stated that the accountant believes that certain receipts are 'dodgy'. All i want from the accountant is for him to declare his relationship and or any interests he has. Put simply i don't want to use an accountant who is not working within the interests of the company.
Expert:  F E Smith replied 9 months ago.

Limited companies don’t have partners. Limited companies have directors and shareholders. Partnerships have partners.

The issue of being a shareholder and being a director are totally separate.

Someone can be a shareholder without leaving a director and can also be a director without really shareholder.

For example, someone may own shares in BT but may not be a director. The directors may not necessarily own shares in the company they work for.

When he says “with immediate effect” could well be in breach of contract although you may want to get rid of him immediately and provided he agrees, you can do that. He may be entitled to payment and holiday pay but that would be for you to agree between you.

If he is agreeable you are agreeable for him to go immediately, it should be put down to a compromise agreement on which he takes legal advice and is on which you tell him that he will no longer be able to access company email or the bank or anything else. Tell him that you will be contacting all suppliers and customers and advising that that he no longer works for the company and giving the new contact.

You should also put a notice into the London Gazette because that is a “notice to the world”.

Regarding the accountant, you put it in writing and simply ask directly. Say the less personal longer works for the company and you are concerned that there is a potential conflict of interest with the accountant in respect of both those interests and for the accountant to confirm that he has no involvement with the ex-director.

In the legal profession, ever conflict of interest arises, the solicitor must stop acting for both parties, it cannot simply choose just one. I don’t think it’s the same with accountants but you would be entitled to know whether the ex-director is a client of theirs or not and you then make your own mind up as to whether you want to stay with the accountant or not.

Can I clarify anything for you?

Please rate the service positive.

The thread remains open for further exchanges.

Best wishes.

Customer: replied 9 months ago.
Hi,That pretty much answers my questions.So before we close the thread is it my right seeing as he has resigned as director to suspend email accounts, all access to office and paperwork and ask him to return anything (paperwork) that relates to the company? (non personal items)Shaid
Expert:  F E Smith replied 9 months ago.

Remember that you will need to remove him from the register at companies house.

Once he is no longer a director,

he is no longer entitled to access to the email account or office premises or paperwork and he is under duty to return anything belonging to the company, to the companyincluding but not limited to mobile phones belonging to the company, car, paperwork, computer et cetera.

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