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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 49832
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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can i resign as director and shareholder because of illness

Customer Question

can i resign as director and shareholder because of illness etc
Submitted: 4 years ago.
Category: Employment Law
Expert:  Ben Jones replied 4 years ago.

Ben Jones : Hello, my name is Ben and it is my pleasure to assist you with your question today. What do you wish to do with your shares?
JACUSTOMER-1zueolio- :

I want to come out completely from the business as it is too much responsibility and I am doing all the work and very little wages. I would like for the person, (my husband) who set up the business and made me Director to take over the whole business as I am too ill to carry on with being Director of the company and no longer want any association or contact with the business. I don't understand any of legal requirements as it was my husband who set it all up and I do not have good command of English and do not know under these circumstances if I am entitled to any money or shares if I leave. But I was made a a fifty percent shareholder at the beginning> i don't want to argue with my husband over money, I just want out, but if I am legally entitled then want to know first how to remove my name from business and to know if I am entitled to any monies since it was me that has done all the work after he set it up. All the money he put into the business was paid back very soon after, therefore i desperately need quick answer as to what best to do. many thanks

Ben Jones :

You can resign as both a director and shareholder at any time, although the two are separate processes.

To resign as a director you need to complete form TM01:

You can send it directly to Companies House and that will automatically terminate your directorship. There is no compensation or other financial gain from doing this.

To resign as a shareholder you need to surrender your shares in some way. You could either sell them to the existing director, to the company or to another person. The shares will only be worth what someone is willing to pay for them. People do make money from selling their shares but that is only if there is a demand for them and someone is willing to pay the price asked. If you are struggling to sell them on, then you may just have to sell them for a nominal value in order to exit the business. You cannot force the director or the company to buy these off you for the value you place on them. It means you would either be stuck with them or you would have to get rid of them in the speediest possible manner, which could mean you get nothing for them.

JACUSTOMER-1zueolio- :

Hi Ben, please can you let me know if a shareholder can be removed without his consent due to not any input into the company?

Ben Jones :

Shareholders have very few obligations towards a company - they are there to provide the capital but it is the directors who have the main responsibilities. In general, shareholders can only be forced to give up or sell shares if the articles of association or some contractual agreement include this requirement.

Ben Jones :

Please let me know if this has answered your query or if you need me to clarify anything else for you in relation to this?