Route to the door is different for Directors

When Suella Braverman was removed from her cabinet post she decided to take a defiant stance, with an open letter criticising PM Rishi Sunak for reneging on promises and calling for a leadership election.

It was a defiant, headline-grabbing move and one that may inspire other discontents looking to speak out against their bosses.  But the path for a dissatisfied cabinet minister is not one that may be translate so easily in the corporate world.

For a company director, while resignation may mean they are no longer bound by general duties, their corporate responsibility can carry on long after stepping down from the board.

Under the Insolvency Act 1986, if a director has allowed a company to continue trading when there is no reasonable prospect of avoiding insolvency, they could be liable, even after resigning.

Similarly, a director who has acted negligently, fraudulently, or in breach of their duties during their time may be held personally liable for any losses later incurred by the company.

Neither will resignation be any protection if a conflict of interest arises through use of any property, information or opportunity gained during a time as director.  And if a director has made personal guarantees to secure any company loans or debts, these remain binding, regardless of whether they have resigned.

Importantly, directors looking to resign must ensure that the company’s finances and other corporate responsibilities are well managed to minimise any risk of personal liability later on, as compliance with the Companies Act 2006 requires directors to exercise reasonable care.

Even if a director leaves the business in a position of financial stability, if the company were later to become insolvent then any director who served during the three years running up to the insolvency could be subject to investigation.

The impact of this could be far-reaching.  For example, where a director is found to have played a role in the company’s difficulties in those three years, they could be disqualified from being a director for up to fifteen years, which could prevent them continuing in any subsequent role as a director.

For an MP, the resignation or dismissal may be very high profile, but it’s effectively a clean break.  For a director, it’s important to be sure that any resignation takes account of the whole picture and they ensure that financial management and other corporate responsibilities are all in good order before they sign the exit paperwork, if they want to minimise any future risk of personal liability.

To discuss this or any other related matter, please call Jane, start a live chat or email us at

*This is not legal advice; it is intended to provide information of general interest about current legal issues.


Jane Crosby

Partner, Head of Dispute Resolution & Accredited Mediator

Jane is a Partner based in the Guildford office and she is also Head of the Dispute Resolution team here at Hart Brown. Jane specialises...

Jane Crosby -Head of Dispute Resolution

Partner, Head of Dispute Resolution & Accredited Mediator

Jane Crosby

Jane is a Partner based in the Guildford office and she is also Head of the Dispute Resolution team here at Hart Brown. Jane specialises in employment Law and commercial litigation and brings more than 15 years' experience to her role.

Prior to entering the legal profession, Jane was employed in the aviation industry. This experience is appreciated by many of Jane's clients who note that she is able to take a commercial and pragmatic approach to any legal issue that they face.

Jane acts for a wide range of individuals and businesses and her areas of specialism include aviation, property related industries and IT. Jane regularly advises on aspects of employment law, such as settlement agreements, employment contracts, policies and procedures, redundancies, equal pay, data protection, issues arising from TUPE and reorganisations, the calculation of holiday pay, bonus and commission payments, disciplinary and grievance issues, dismissal and termination issues, the protection of confidential information and the enforcement of restrictive covenants. Jane gets involved in GDPR training for her clients and she is able to deliver tailored employment law training sessions upon request.

As a commercial litigation lawyer, Jane also deals in shareholder and directors disputes, commercial contract disputes and the enforcement of restrictive covenants.

Jane has been involved in successful high value commercial litigation for clients in the High Courts, she is an accredited mediator and she is a member of the Employment Lawyers Association.

Jane is often asked to write for a number of well known publications, including The Daily Mail, The Telegraph and The Week and she has been interviewed on BBC Radio 4.

Here is small selection of the feedback that Jane has received:

“Jane, I cannot sincerely thank you enough for your wise counsel and am delighted to have made your acquaintance. If I am blessed with a new position somewhere I will hand over my contract in the first instance to you. Likewise, any of my friends, peers, romans and countrymen wanting advice, I will point them in your direction.”

“Jane, you have been most resilient on my behalf for which I sincerely thank you for all your endeavours. I have a tremendous working relationship with Hart Brown and you have undoubtedly compounded this further."

“I appreciated the clarity of advice given at a stressful time”.

“A sensitive and highly professional approach and efficient work in the interests of the client”.

“Your advice, conduct and assistance have been indeed outstanding and very professional but also – and most importantly – very humane”.