If the company fails to do this, the company will be struck off. Any assets will be auctioned or become bona vacantia.
If a company is left without directors, a shareholder can request a general meeting to appoint new director s. If none of the shareholders have the authority to call a general meeting, they can send an application to the Court who can order the meeting. A sole director is actually able to resign as a director, leaving the company with all the consequences that might follow, without being in breach of their duties to the company.
Some companies also have legal clauses in place to ensure that a sole director is unable to leave until a replacement is found to prevent this situation. It is more common for a replacement director to be found before the resignation is finalised. When a sole director wishes to resign, they typically inform any other shareholders, or find a replacement themselves. If the sole director is also the sole shareholder, they can either choose to sell the business, or to close it down.
You can learn more about this in our guide to resign as a director. Stay in the loop with all the latest business news, government announcements and expert advice from our team.
If notification of cessation is not lodged with ACRA, this could amount to an offense of non-disclosure. Until the notification is lodged, the cessation will not take effect.
This means he is still responsible for managing the company. An important part of managing a Singapore company is keeping its fully compliant. We help make this task a whole lot easier. Contact Us. Conversation Videos Contact Go. Such self-notification may be lodged when the resigning director has reasons to believe that the company will not notify ACRA of his or her resignation.
The company secretary has resigned, and there are no directors or the remaining directors are disqualified, and there are no other officers in the company to notify ACRA What are the next steps for the company? Some of the considerations for the company are as follows if: A resigning director is the only ordinarily resident director of the company, then another ordinarily resident director must replace the resigning director.
The resigning director has also played the role of the company secretary , then the company has to appoint a company secretary as the office cannot be left vacant for more than six months at any one time.
Or its contract with the director requires the shares to be transferred to the remaining shareholders. Then the procedure to transfer his shares must be completed.
The resignation would affect the authorized signatory of the company. Then it has to be duly amended. All concerned parties such as the bank, vendors, and clients must be notified. Other parties such as the major investors, shareholders, customers, suppliers and employees need to be notified.
The resigning director should remain in service during the period of notice or should be sent on leave. You will also still face disqualification as a director if the company has been trading at the expense of the crown whilst you were in office. Resigning as director will not mean that you are released from any personal guarantees you have given for the business. Limited liability offers the directors protection from company debts.
However, if you have signed a personal guarantee against a company loan, you will still be jointly and severally liable for that debt if the company can longer make repayments. In such cases, you must step in and use your own, personal funds to repay the creditors. A director resignation procedure will not invalidate this agreement.
You must think very carefully as to whether you do want to resign if you have given personal guarantees. As mentioned earlier, your director responsibilities will cease after your resignation, along with your control over how the company is run. If the company were to make a wrong move in its particular market, you do not have the power to help. In the very worst case, you may even be contacted for repayments to creditors if the business does not have the assets to meet to repay debts.
You can ask to be released from the personal guarantee upon your departure as director, however. On the other hand, if you are owed any money in unpaid wages etc, this should also be brought up to date on your departure. If you are considering resigning as a director and are seeking guidance for doing so, our business rescue experts can help ensure you understand the procedure and what it means for your future.
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