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Vacation of office - Coggle Diagram
Vacation of office
Procedure
Where the vacation of office is voluntary obtain a letter of resignation from the director to include any subsidiary companies where appropriate. If not covered by a separate compromise agreement the resignation letter should also confirm that there are no fees owing to the director or if there are, relevant details
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Although vacation of office does not require board approval, it is customary to note the vacation of office at the next board meeting
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Any fees or expenses due to the period up to cessation should be paid and PAYE Form P45 completed as necessary
If the director held any share options or bonus arrangements these may have been triggered by the vacation of office. If this is the case notify the director or their personal representative if the vacation is due to their death or incapacity of the steps required to be taken
If it is the company's practice to include the names of directors on headed stationary make arrangements for the stationery to be amended and old stocks destroyed
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Resignation
This will usually take effect from the date on which the letter of resignation is received by the company unless this states some subsequent date on which the resignation is to become effective.
To be effective, the resignation does not need to be accepted by the board, unless the articles provide otherwise
Absence
If the director is absent from board meetings for some specified period (often 6 months) without leave of absence.
In order to monitor the operation of any such article, the secretary should arrange for the board to grant leave of absence where it is known that a director is likely to be absent for a period exceeding six months, e.g because of overseas travel on the company's business or because of long term illness
The office of director is vacated on the death of the office holder, under statute or under a provision in the Articles of the company
A relevant provision in the articles might be that the directors are appointed for a fixed term and on expiry of that term, their appointment automatically ceaaes
If the director becomes bankrupt, unless the court permits the appointment to continue
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Where the articles stipulate any qualifying criteria such as a minimum shareholding or professional qualification and that criteria has not been met, the office of director would be vacated automatically at the conclusion of the qualifiying period
In the case of a company where the director reaches a specified age set out in its Articles, the office of director would be vacated at the conclusion of the next AGM. Although such a general provision was included in Table A, these provisions are now likely to be in contravention of age discrimination legislation under the Equality Act 2010
If a receiving order is made against a director or the director compounds with their creditors generally
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If the director is removed from office, e.g by a notice signed by all remaining directors or by any holding company