Talk

Advanced search

Mumsnet has not checked the qualifications of anyone posting here. If you have any legal concerns we suggest you consult a solicitor.

If I am Director of a company and resign, do I revert to being an employee?

(8 Posts)
kissmyheathenass Mon 27-Jul-15 18:36:00

I was told to resign as Director of a company of which I hold a minority shareholding and work there full time with wages paid at the end of each month. My question is now I have resigned as a Director, am I now covered by the normal rights of an employee? There is no shareholders agreement and no contracts of employment.

TIA

kissmyheathenass Mon 27-Jul-15 19:02:09

bump

crabbyoldbat Tue 28-Jul-15 00:15:17

If you were a Director, on the company paperwork, rather than just an employee with the title director, then you are probably still an employee, (and would have the usual employee rights). Whoever the remaining company directors are your employers. You don't have to be a director to own shares, either, so, unless you also sold them/signed them over, you still own them.

Collaborate Tue 28-Jul-15 08:23:59

A director is an office holder, not an employee. If you resign as a director you need a contract of employment, otherwise you are neither employee or office holder.

A director who is not also an employee has no employment rights.

RedDaisyRed Tue 28-Jul-15 16:53:40

"work there full time with wages paid at the end of each month"
Do they take off tax under PAYE? If so you might well be an employee or are you just paid dividends?

Also why resign just because you were told to? If you are no longer a Companies Act director you will have fewer rights.

kissmyheathenass Tue 28-Jul-15 18:40:40

thank you all for your responses.

RedDaisyRed, I was "asked" to resign otherwise my ex co-Director threatened to file a section 168 (?) with a removal reason of breach of trust and loss of confidence which would not look good on public records. He had no reason to accuse me of this but as a majority share holder he could railroad through a shareholders vote to have me removed. I resigned under duress.

I am paid at the end of each month and the company deducts tax and NI from my salary.

If you resign as a director you need a contract of employment, otherwise you are neither employee or office holder.
I thought if someone is employed and paid through PAYE then they have an implied contract so when I resigned as a Director I am still being paid and still working there and serving out my notice as an employee.

prh47bridge Tue 28-Jul-15 19:01:13

Whoever the remaining company directors are your employers

No they are not. The company is your employer.

my ex co-Director threatened to file a section 168

Too late now but I'm afraid you took this threat too seriously. Section 168 simply allows a company to remove a director before they come up for re-election by passing a resolution at a shareholder's meeting. The public record does not show the reason for removal. The form used to notify Companies House is the same one that would be used if you resigned as a director. It simply notes your name and the date you ceased to be a director.

From the information posted you were both a director and an employee. You had a contract of employment even if it was unwritten. You have resigned as a director but you are still an employee, although the fact you are serving out your notice suggests you have resigned as an employee as well (not surprising in the circumstances described).

RedDaisyRed Wed 29-Jul-15 21:24:28

I agree with prh.

however there would have not been much point fighting the removal as director as the other shareholder had over 50% of shares so you would have been sacked as a director anyway but you might have an unfair dismissal claim unless as pr suggests you have already resigned as an employee . Have you? You could always write to him and say although you have been removed as a director you have not resigned your employment and will be continuing to work as an employee and see what he says.
Have you worked for the company for 2 years?

Also presumably he wants to buy out your shares so may be you can negotiate an emplyoment claim settlement plus a sum for him to buy your shares.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now