How Do I Write a Director’s Resignation Letter?

In Short

• Formal resignation: Directors must submit a signed and dated resignation letter to the company’s registered office.

• Notification to ASIC: The company must notify ASIC of the resignation within 28 days using Form 370.

• Legal compliance: Ensure the resignation complies with the company’s constitution or shareholders’ agreement.

Tips for Businesses

When a director resigns, promptly update the company’s records and notify ASIC to avoid penalties. Review the company’s constitution or shareholders’ agreement for any specific resignation procedures or notice periods. If the resigning director is the sole director, appoint a replacement immediately to maintain legal compliance.

Summarise with: ChatGPT Perplexity Microsoft Copilot

---

Table of Contents

• When Is a Director’s Resignation Letter Used?
• How Do I Draft A Director’s Resignation Letter?
• Tips on Drafting a Director’s Resignation Letter
• Key Takeaways
• Frequently Asked Questions

A director wishing to resign from their role as a director can do so through a director’s resignation letter. If you are a company director, you will need to sign, date and deliver the resignation letter to the company at its registered office. The letter should be professional, clear, and concise while adhering to legal requirements.

When Is a Director’s Resignation Letter Used?

A director’s resignation letter is used when a director wishes to cease their role as a company director. Most of the duties that bind a director will consequently end when the director no longer acts in that role.

After you resign as a director, the Australian Securities and Investment Commission (ASIC) will need to be notified within 28 days of the resignation. In most cases, the company will update its director’s register and update its ASIC records to reflect your departure. You do not have an obligation to notify ASIC. However, you can submit a completed ASIC Form 370 and attach a copy of your resignation letter to the company.

How Do I Draft A Director’s Resignation Letter?

There is no specified format that a director’s resignation letter must take. However, a director’s resignation letter should be clear that you are resigning as a director with effect from a specific date (either the date of the letter or a specific date in the future).

Guide to Employment Disputes

Learn how to manage employment disputes and effectively protect your business from legal action. This guide delves into the most common employment disputes.

Download Now

Tips on Drafting a Director’s Resignation Letter

Although there is no set way to draft a director’s resignation letter, the following are some pointers to consider when drafting the letter:

1. Format and Address: Use a formal business letter format. Address it to the company secretary or board chairperson, including the date and your contact details.
2. Clear Statement of Resignation: Begin with an unambiguous statement of your intention to resign, specifying the effective date.
3. Legal Considerations: Be mindful of your ongoing obligations. If applicable, consider including a statement acknowledging your continuing duties.
4. Notice Period: Ensure you comply with any notice period required by the company’s constitution or shareholders’ agreement.
5. Handover Information: Offer to assist with the transition process, including completing ongoing projects or transferring responsibilities.
6. Company Property: State your intention to return any company property in your possession.
7. Subsidiary Boards: If applicable, clarify whether you’re also resigning from any subsidiary boards or committees.
8. Avoid Negativity: Refrain from including negative comments about the company or other directors, as this could potentially lead to legal issues.
9. Keep a Copy: Retain a signed copy of the letter for your records.

Remember, while the letter should be concise, it is a legal document that marks the end of your directorship. It is crucial to strike a balance between professionalism and legal compliance. A well-drafted director’s resignation letter not only fulfils legal requirements but also helps maintain professional relationships and protects your reputation in the business community.

Key Takeaways

If you are resigning due to concerns about the company’s operations or governance, we recommend that you consider seeking legal advice before submitting your resignation. This can help protect your interests and ensure you’re meeting all legal obligations. 

Under the Corporations Act, a director’s resignation will take effect either on the day that they stop being a director, provided ASIC is notified within 28 days of that day, or otherwise it will be the day that ASIC is notified of the resignation. ASIC can be notified by the director themselves or the company. 

If you want to ensure you are legally compliant, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1800 875 477 or visit our membership page.

Frequently Asked Questions