WHAT IS A DIRECTORS LETTER OF RESIGNATION? 

A Director’s letter of resignation is a formal notice to the position as director of the company given by a director to the company.  The resignation can be in the form of a letter or in some jurisdictions a Form TM-01 may be used. Even though a formal letter or form is submitted the Director’s position in a company is unique and carries a lot of responsibility, therefore, the director should apprise the other directors and shareholders of his or her intent to resign. In addition to submitting his or her letter or form of resignation to the board of the company the director may also have to file a form with the Registry of Companies.

WHEN DO YOU NEED A DIRECTORS LETTER OF RESIGNATION?

A Director’s letter of resignation is needed any time a director decided to leave his or her position as a director on the board of a company. The letter is required to allow the company to begin making changes and accommodations that will be required as a result of the director’s departure. The director when if at all possible, should try to give the company as much as notice as he or she can because a lot of paperwork must be revised incident to his or her departure.

WHAT IS INCLUDED IN A DIRECTORS LETTER OF RESIGNATION?

The following should be included in a directors letter of resignation.

• The name and salient information of the resigning director. The name of the company as well as any other important information about the company.

• The date the resignation will become effective. This date is very important because the director will still remain liable for actions performed by the company in the period prior to his or her resignation even after he or she has left the company.

• A statement confirming that the director has submitted the required forms and notices with the Registry of Companies advising the Registry of his impending resignation.

• A statement acknowledging that upon the departure of his or her position as a director he or she will no longer have a say in how the company is operated and that he or she will no longer have the privileges accorded a director and access to company records.

• A statement acknowledging the adherence and ongoing confidentiality responsibility of the director even though he or she will no longer have the physical responsibilities of the director position of the company. The letter should confirm that the director is still governed by the non-disclosure and non-compete clauses he or she signed at the onset of his or term as a director.

• A statement that the directory has returned or will return all company papers, records and or other materials that were used in his position as director before leaving his or her position.

• The letter can also include the dates or duration of his or her tenure as a director of the company as well as the reason for leaving.