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Resignation of Directors

There is no legal limit to the amount of time that you can remain a director of a private limited company, as long as you continue to meet the mandatory requirements. However some restrictions are imposed for public companies and the Multi-Unit Development Act, 2011 also limits the terms that Directors of Owners’ Management Companies may serve on the board.

There are of course a wide variety of circumstances that may require a Director to resign, ranging from a conflict of interest, a desire to seek new opportunities elsewhere, a disagreement with the board of directors on a commercial point or indeed if they believe that the company is undertaking activities that are illegal or fraudulent.

Retirement by Rotation

Some companies, inline with Table A of the articles of association, include a regulation which provides that up to one third of directors retire each year. Usually these directors then offer themselves for re-election at the annual general meeting, conversely a director may retire by therefore simply not offering himself for re-election. In practice this provision tends to be cumbersome and inconvenient and many private companies amend their Articles to remove it.

Resignation by Notice in Writing

Table A again requires that notice of resignation be given in writing. Such notice should be addressed to the chairman or secretary and be precise as to the actual date of resignation,

furthermore it cannot be retrospective.

Whilst this provides a general rule of thumb for the most common mechanism utilised for resigning as a Director, individual companies may include specific provisions of their own Articles such as the length of notice required and the format or manner in which it is to be delivered.

How is a Resignation Notified to the CRO?

As with the appointment of a Director, the resignation of one must also be notified to the CRO on a B10 form within 14 days of it occurring. Are signing Director cannot sign his own B10 form and the onus is therefore on the company, and the remaining Directors, to ensure that the form is lodged. Just like an appointment, the company must also ensure that the Register of Directors & Register of Directors’ Interests is duly updated.

What Happens if a Company Fails to File a B10 Form?

If a company fails to file aB10 form in respect of a Director who has resigned, there is a procedure in place whereby the former Director can notify the CRO of his own resignation

using a Form B69. Prior to filing the form B69, the Director in question must follow a specific procedure.

This includes notifying the company in writing of his resignation, which, if not acted upon, is then followed by a further request to the company for the B10 to be lodged within 21 days and the resigning Director also forwarding a copy of his resignation and his notice of request to the company, to every person who is, to his knowledge, an officer of the company.

Removal of Directors

A Director cannot be dismissed by the board unless the Articles of Association make specific provision for it. However, if someone is a life Director of a private company, they can be dismissed from that position, at any time before the expiration of their term of office, by an ordinary resolution passed by the shareholders in general meeting.

This is regardless of any provisions that might exist in the Articles of Association or indeed in any contract of service between the company and the Director. Are solution to dismiss a Director in this manner must firstly be proposed by a shareholder who requisitions the Directors to call an EGM, which must be held at extended notice.

The company must also send notice of the EGM to the Director who is to be removed and he must be afforded the opportunity to make representation. Once there solution has been passed,

the form B10 is then filed with the CRO in the normal manner. When undertaking any procedure to retire or dismiss a Director, extreme care should be taken to ensure that their signing powers on the company’s bank account and elsewhere are cancelled. The dismissal of a Director may

also lead to the Director in question seeking damages, if he is an employee, for breach of his service contract, or he may also be able to claim redundancy payment or compensation

for wrongful dismissal.

If he is also a shareholder it may lead to a winding-up petition or a petition based on oppression. For these reasons, legal advice should always be sought prior to proceeding with the removal of a Director.

Resignation of Directors is a follow up article of our past blogs, How to Become a Director? and Appointing a Director.

Contact our team for advice and information. Call FMB on 01 645 2002 or email

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