Liability of a Resigned Director

[muppie]

When a director resigned from his directorship, will he continue to be liable for anything that happens to the company, e.g. for something that started when he was still being a director for example ?

I am sure that something that comes up AFTER he's resigned if it can't be linked back to his directorship won't affect him, correct?

 

[Programmer]

I am sure that something that comes up AFTER he's resigned if it can't be linked back to his directorship won't affect him, correct?

Mupp, the way I understand it is this:

a) If you are a Dir and are found negligent then you're toast.
b) If you were a Dir and something happens when you were a Director and are found negligent then you're toast.


Simply put, resigning from a responsibility releases you from responsibility for events that occur after you resign. However, even then, if a court finds that you would/or should have been aware of something (in your role) before resigning then you could still be toast!

Lesson: Always act when you should and do not act when you should not...

I'm no lawyer, so if you're in any predicament consult an expert.

 

[quiggles]

My understanding is that if people can even draw a link between your directorship and anything that happened, you may have problems.

EG. The company is going down the tubes (and you didn't know it but could have if you had had financial qualifications), you resign and later it's found that investors had not been informed of the position of a company, and had later put money into the company...and you find yourself in court.

The courts are requiring that directors not only fulfil their duties but ensure that they are adquately qualified and competent to do so.

Always be careful if offered a directorship.

 

[Chev]

If you were involved in fraudulent matters previously or insolvent trading, then you will continue to be liable. In terms of liability from the business etc, as long as you have not signed up to any personal guarantees/promises or some form of agreement which may affect you personally, you are ok once you have resigned.

Never be a director unless you are going to be participating in the decisions and reviewed all documents closely and personally.