Can I step down as a director to protect myself?

Stepping down as a director does not protect you from liability for actions taken while you were in office, and resigning during financial difficulties can actually make matters worse rather than better. If wrongful trading or other misconduct occurred during your tenure, you remain liable even after resignation—liquidators and the Insolvency Service can and do pursue former directors for years after they've left their positions. Moreover, resigning when the company is in financial distress can itself be viewed as evidence of misconduct, suggesting you knew insolvency was inevitable and were attempting to evade responsibility. Courts and insolvency practitioners take a very dim view of directors who resign suddenly when problems emerge, seeing it as abandonment of duties rather than responsible conduct. If you resign and the company subsequently fails, investigators will examine whether you left because you recognized insolvency was unavoidable but wanted to avoid personal liability—this can actually strengthen wrongful trading claims against you by demonstrating you understood the position was hopeless. Furthermore, resignation doesn't absolve you of personal guarantees you've signed, overdrawn loan accounts that existed during your tenure, or preferential payments and asset disposals that occurred while you were in office. There are very limited circumstances where resignation might be appropriate: if you genuinely have irreconcilable differences with co-directors about how to handle the crisis, if you're being excluded from decision-making and want to formally distance yourself from decisions you don't support, or if continuing in office would compromise your professional obligations (for example, if you're a qualified accountant and other directors are ignoring your advice about insolvency). However, even in these situations, resignation must be handled carefully with legal advice, and you should document thoroughly why you're resigning and what advice you gave before leaving. The far better course of action when a company is in trouble is to stay in position and act responsibly: seek professional insolvency advice, document your efforts to minimize creditor losses, push for appropriate action even if co-directors resist, and ensure you're demonstrably acting in creditors' best interests. If you resign, you lose any influence over how the situation is handled but retain all liability for the period you were involved. The only way to truly protect yourself is through proper conduct while in office, not through resignation when problems arise. If you're considering resignation because the stress is overwhelming or you fundamentally disagree with other directors' approach, seek legal advice immediately about the implications and how to resign in a way that documents your concerns without increasing your personal exposure.