Who signs if no director?

Who signs if no director?

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Got a limited company that had 2 directors that we are preparing accounts for.

One director resigned prior to the year end and the other director resigned after the year end.

There is currently no director in place.

Given the director who resigned after the year end did so before the accounts were prepared then when we date the accounts there will be no one to sign the accounts off.

What happens in this situation?

There is corporation tax due so a DS01 to strike the company off wont work but we cant submit the company tax return without signed accounts.

Replies (19)

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By User deleted
20th Aug 2015 14:58

A few points:

1. If there are no directors the company is in breach of s.155, and as a consequence a direction may be issued under s.156.

2. Generally the Articles (whether Table A or the Model ones) may carry a provision that the members may, by passing an ordinary resolution, appoint a director. So if the resigned directors were also not shareholders this option may still be open. 

3. If the directors are still not appointed, the company will finally be struck off the public register.

4. Form DS01 need to be signed off by the director(s) (s.1003) so unless there is a director it can't be proceeded with

5. Whether to pay or not to pay corporation tax, or for that matter any decision, is to be taken by the directors. If there are no directors nothing is going to happen.

6. Make sure your appointment as accountants or auditors was/is still valid (!!!!) and that the company owes you nothing!! 

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Flag of the Soviet Union
By thevaliant
20th Aug 2015 15:19

Curious
One director resigned before the year end, then another director resigned AFTER the year end but BEFORE accounts were prepared (your own post).

Why did you prepare accounts if no director existed to issue instructions?

The simple answer lies above, but with no directors, this company isn't going to last long. Are there any shareholders who were NOT directors who want to carry on/appoint new directors?

Do you know why both directors resigned?

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Replying to Tax Dragon:
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By marks
20th Aug 2015 22:46

answers

Re above

1. We havent yet prepared the accounts.  But were in the process to start.

2. Only 2 shareholders.  Both were the the directors who resigned.

3. The business was involved the "legal high" sector which is being targeted at the moment and both didnt want to stay involved.

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By johngroganjga
20th Aug 2015 15:30

If the former directors are also the only shareholders you should obviously down tools and ask one or both of them what their intentions for the future of the company are.

If there are other shareholders you should ask them the same question.

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Replying to johnhemming:
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By marks
20th Aug 2015 22:47

answers

johngroganjga wrote:

If the former directors are also the only shareholders you should obviously down tools and ask one or both of them what their intentions for the future of the company are.

If there are other shareholders you should ask them the same question.

Former directors are the only shareholders.  The business has now closed and the intention is to close the company.

No other shareholders

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By Cloudcounter
20th Aug 2015 15:42

Who signs . .

. . . your cheque to pay your fees?!

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Replying to Paul Crowley:
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By marks
20th Aug 2015 22:47

answer

Cloudcounter wrote:

. . . your cheque to pay your fees?!

We have been paid by DD in advance for the work to be done.

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By marks
20th Aug 2015 22:48

solution

Will see if can get one of them to be appointed in the short term to sign off the accounts and company tax return then they can resign again if they want.

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Replying to Paul Crowley:
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By User deleted
21st Aug 2015 07:19

Principal-Agent

marks wrote:

Will see if can get one of them to be appointed in the short term to sign off the accounts and company tax return then they can resign again if they want.

You (as the agent) take instructions from the company represented by its directors (the principal). If there is no principal to take instructions from what for would you be spending your professional time on this??

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By Penfold
20th Aug 2015 23:34

no one signs

and no one pays you.

 

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Replying to thomas34:
By Tim Vane
21st Aug 2015 00:34

I do hate it...

Penfold wrote:

no one signs

and no one pays you !

**** head

...when people come in from the pub and start posting without bothering to read all the previous replies.

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paddle steamer
By DJKL
21st Aug 2015 01:49

Seen this sort of question posted before

I have seen this sort of question posted before and the following questions never appear to be answered.

 I presume notification re second resignation cannot have been properly submitted to Companies House as there would have been no extant director at the time to sign the form?

In such a circumstance last man standing obviously wrote to the company director(himself) advising himself that he was resigning. Surely, given his then responsibilities under the Companies Acts, as a director, he ought to have rejected his own resignation.

Chickens and eggs spring to mind.

 

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By cheekychappy
21st Aug 2015 08:16

It was very stupid of both directors to resign. 

 

Their names will still be on public record as having been affiliated with the company. Would it have hurt to stay on a little while longer to submit everything and dissolve the company properly?

 

I wouldn't spend time preparing accounts for someone who has no authority to approve them. 

 

Considering the industry these guys were in and how many deaths have been attributed to legal highs, this would be an appointment I would have declined from the start anyway.

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Flag of the Soviet Union
By thevaliant
21st Aug 2015 09:28

Well:

With no directors anymore, and with you having been paid in advance I would:

1. NOT start any work (I can't stress this enough - don't do any work)
2. Write to the shareholders asking them what they intend to do with the company and when new directors will be appointed

I'm pretty sure you'll get no response.

As to the payment in advance, the correct course of action would be to return the funds, but that could prove tricky with no directors in charge. I'd therefore be inclined to sit tight until the situation is resolved one way or the other.

If you get meaningful answers from the shareholders, and appointments to directorships are made, maybe think about preparing the accounts.

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By marks
26th Aug 2015 10:13

thanks for above

Thanks for above comments.

One of the shareholders is coming in next week to go over it all so hopefully we will get it sorted one way or the other.

 

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By Paul Soper
26th Aug 2015 11:44

Legal Highs...and Lows

The number of death from legal highs is still very low when compared with other forms of substance abuse but that is not relevant directly to this problem.

The two directors want to disassociate themselves from the trade that the company formerly carried on but failing to produce accounts, submit returns, pay CT etc is likely to have the opposite effect of drawing attention to them as potential defaulters.  If the company has ceased the activity then the best course of action could be to change the company's name to one not associated in any way with the former activity and then just wind it up as normal as quietly as possible and then walk away...

Hopefully the shareholder coming in will see that this is a sensible move.

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By iknell
26th Aug 2015 13:47

Director

It was my understanding that the second director to resign couldn't resign therefore Companies House should refuse his resignation and they are still legally a director.

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By iknell
26th Aug 2015 14:05

But...

It can't be served properly....

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By zebaa
26th Aug 2015 15:15

@iknell

The last act the director does (as director) is resign. Why do you have difficulty with that?

In cases like this Co house will strike off the company after giving warning - and so long as HMRC does not object. BUT - big - but - even if HMRC do object Co house will try again in 3 - 6 months time. Sooner or later it goes through.

 

 

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