Sole Directors (Death and Resignation)
There is a legal requirement for a company to retain at least one director (section 154 Companies Act 2006).
Resignation:
Every company has its own legal personality, separate from its directors and shareholders. As such, there is no inherent bar to a sole director resigning and a company will not cease to exist simply because it no longer has directors. In addition, it is not a breach of the director’s fiduciary duties to the company. However, it may be a breach of the sole director’s employment contract (if they have one) if such a director leaves without giving the required notice period.
As the business of a company is managed by the directors, a new director will need to be appointed. Provision for the appointment of directors is usually set out in the company’s articles which will usually provide that a director may be appointed by ordinary resolution of members.
Death:
A director’s appointment will terminate on the director’s death. As a private company is required to have at least one director, a new director will need to be appointed.
Article 17 of the model articles for private companies provides that the general meeting has power to appoint directors. Article 17 also makes provision for the appointment of directors by the personal representatives of the last shareholder to have died where, because of death, the company has no shareholders and no directors.