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Wondering what actually happens when a director resigns from a limited company? Whether you’re stepping down to pursue new opportunities or winding things up for good, there’s a bit of admin (and tax 😅) to get sorted first.
In this guide, we’ll explain everything you need to know about resigning as a company director – from the legal steps and paperwork to tax returns, shareholding rights, and updating company records.
First things first… if you’re ready to resign, you’ll need to do it properly.
Step 1: Write to your company. Let the board or remaining directors know. This is usually done via a resignation letter.
Step 2: Notify Companies House. The company needs to file a TM01 form within 14 days to officially remove you as a director from the public register.
You can file the TM01 form online or by post. 📮 Once the form is filed and processed, your resignation becomes official.
If you’re not the sole director, things are even more straightforward. 🎉 You can step down, and the company will continue as normal, with the remaining director(s) assuming your responsibilities.
In most cases, yes.
HMRC requires company directors to file a Self Assessment tax return, even if they’re paid only through PAYE.
If you earned:
…then you’ll likely still need to file a tax return for that tax year.
We’ll pair you with an accredited accountant who’ll handle it for you – no stress, no spreadsheets, just one simple online process.
One thing that doesn’t automatically change when a limited company director resigns is their shareholding.
Unless you actively transfer or sell them, your shares are yours to keep. This means you:
However, if you want to resign and pass your shares on completely, you’ll need to:
Just make sure any changes are properly documented, updated in the PSC register (that’s the People with Significant Control), and reported to Companies House to keep everything in order.
When a director steps down from a limited company, the business’s tax responsibilities remain the same; Corporation Tax, VAT, payroll, and other filings continue as usual.
However, if you were handling things like:
…then you’ll need to pass these responsibilities on. Someone will need to take over and be officially authorised to handle the accounts going forward.
Stepping down as a director from a limited company comes with a bit of housekeeping. Here’s what needs updating:
| What needs updating | Why and how to do it |
| Register of directors | To officially record your resignation in the company’s internal records. |
| Companies House | File a TM01 form within 14 days to remove yourself from the public register. |
| Internal systems | Reassign responsibilities like approving expenses, filings, and managing payroll. |
| Professional contacts | Let your accountant, company secretary, and service providers know you’ve stepped down. |
Make sure you keep everything up to date, just in case HMRC or Companies House come knocking.
That depends. If you’ve resigned as a director but still hold shares, then you’ll still have:
If you’ve sold or transferred your shares, then no, you’ll no longer have any involvement in the company.
You step down, the company updates Companies House, and everything continues to run smoothly. You might still need to file a Self Assessment, especially if you earned dividends or a salary during the tax year.
If you’re holding onto your shares, you’ll still get a say (and a slice of the profits, if there are any). And if you were handling things like payroll or VAT, someone else will need to take over.
It’s not a huge process, but it’s worth doing properly. And if the tax side of things gets confusing, we’re here to help. 👋
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