# Can director resign as employees of a company.



## Tipptop (22 Feb 2010)

My self and my wife are both directors of our company but due to the downturn in business neither of us has being able to get wages at the end of the week for the past couple of months. We are the only full time employees in the business and we have 3 part time employees. 

I'm after doing the P35 last week for last year we paid quite a bit of tax that I don't think I could pay this year. The majority of the tax/ prsi was on my own income and my wife's as we are classed as self employed we get very little tax credits.

What are the implications of resigning as employees but still working full time in the business. As were self employed we would be entitled to nothing if we were out of work so I can't really see the point in paying all this tax and PRSI for nothing.

We loaned the company a sum of money so our income would be the repayments of this loan. At the moment the business is in survival mode and were just hanging by threads and hope thing will improve.

Any help appreciated.


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## Padraigb (22 Feb 2010)

There is nothing to stop a director resigning as an employee. But there might be sense in remaining as employees but on reduced pay, so that you can use your tax credits: it makes more sense than taking money out as loan repayments.

I hope that you are right that you are in survival mode. That is better than permanent decline. Some firms will ride out the present difficult trading circumstances, but I think you should keep a careful eye on things just to be sure that you don't get into a hopeless situation.


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## RonanC (22 Feb 2010)

A director is an employee of the company and the company must have two directors at all times.


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## jack2009 (22 Feb 2010)

RonanC said:


> A director is an employee of the company and the company must have two directors at all times.


 
Can they not just pay themselves nil and neither "resign" as directors or employees?


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## WaterSprite (22 Feb 2010)

A director is not necessarily an employee of the company & does not have to be an employee of the company.  Yes, a company must have 2 directors at all times.


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## Gervan (22 Feb 2010)

You want to keep up at least the minimum PRSI payment, in order to help qualify for pension in the future, so pay yourself a small amount at least. If you keep under your tax credits you will pay no tax. 
If the Company can afford it you can repay yourselves some of the loan, tax free.


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## Tipptop (23 Feb 2010)

Thanks for the help, We will continue to work but as unpaid directors and just keep up the prsi payments


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## fizzelina (23 Feb 2010)

The minimum PRSI payment for self employed person, to keep up their credits, is €253 so this is amount you would need to pay each.


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## NumbrCrunchr (5 Oct 2010)

*Potential tax refunds for salaries*

Hi TippTopp
Depending on how much you have outstanding in loans to the company you may be able to go back and amend your P35s for prior years and get a tax refund. If this is an option you want to look at you can PM me
NumbrCrunchr


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## Paddy199 (7 Oct 2010)

WaterSprite said:


> A director is not necessarily an employee of the company & does not have to be an employee of the company. Yes, a company must have 2 directors at all times.


 
A director is an office holder and is therefore always an employee of the company. Also, being a director, makes you a chargeable person who must file an annual Form 11. Of course, you can pay them €NIL.


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