Can I resign as administrator?

Sometimes, for different reasons, we need to resign from the position of director of a company, but this may not be as easy as it may seem at first sight. We will now set out some indications on the resignation from the position of director.

The directors of a limited liability company shall hold office indefinitely, unless a limited duration is established in the articles of association. If this is the case, it will be necessary to comply with the date set as the deadline and renew the directorship before it expires.

The declaration made by the director of a commercial company confirming his intention to leave his post should in principle have no limitations, since nothing can prevent the director from leaving his post at any time and any opposition to this would be ineffective, since it does not seem to be common sense to be able to force someone to stay in a post or job that he does not wish to continue to hold.

However, in order for resignation to produce the desired effects, a reliable communication of this intention is required by law.  This declaration must be made by one of the means permitted by law, i.e. by notice at a shareholders’ meeting or by a written declaration to the company’s administrative organ.

The most common way is for the resignation to be made by means of a declaration in a notarial deed, i.e. before a notary, with a confirmation that the company is to be notified of the resignation. This notification is made by the notary himself, who must notify the company at the registered office or by sending the deed with acknowledgement of receipt or by going directly to the company’s registered office. A means of guaranteeing receipt of the notification is required.

The company must accept this resignation without the possibility of opposing it.

The simple and reliable communication shall have effect vis-à-vis the company. Subsequent registration of the deed of resignation in the Commercial Register is also effective vis-à-vis third parties.

Failure to submit the company’s annual accounts is not grounds for non-registration of the director’s resignation, however, the provisional deregistration of the company with the Tax Agency is grounds for a negative response to the registration by the corresponding Commercial Registrar, since, as the Directorate General for Registries and Notaries has pointed out in different resolutions, for example, in its resolution of 27 March 2017, the provisional deregistration of a company in the Index of Entities of the State Tax Administration Agency imposes a practically total closure of the register, from which only the certification of registration in the said index is excluded.

However, in order for the resignation to be valid, it must meet a series of requirements, since, if the resignation from the position of director entails the total vacancy of directors in the company, it will be an essential requirement that said director proves that he has previously called a General Meeting in which an item on the appointment of a new director, due to the resignation of the previous director, has been included on the agenda.

Once we have accredited the point at which we call the General Meeting of Shareholders indicating that we are going to resign from the position and that a new administrator must be appointed, the registration of the resignation can no longer be conditional on the General Meeting of Shareholders reaching an agreement or not on the appointment of a new administrator, since this has been clearly notified and stated in the agenda of the meeting, i.e. the shareholders’ meeting has had at least the required 15 days to find a new director, from the time it has been notified of the convening of the new meeting with the resignation of the outgoing director.

This requirement regarding the convening of the General Meeting was established and recognised in the Resolution of the General Directorate of Registries and Notaries dated 26 May 1992. Following the negative classification by the Valencia Mercantile Registrar and the subsequent appeals by the only 3 members of the Board of Directors, the company having been notified of this decision by notary, the negative classification by the Registrar was upheld. Since the simultaneous resignation of the 3 members made it impossible to proceed with new appointments, the resigning directors were obliged to continue to manage the company until a new director was appointed, i.e. until a General Meeting was held to decide on the position. In such a way as to avoid the paralysis of the company, and therefore arguing that the appropriate course of action was to have convened the board of directors, a general meeting with the legal requirements, at which the resignation would be presented and a new administrative body would be appointed, so that the company’s representation would not be interrupted at any point in time.