A company bank mandate is the company’s own instruction to its bank about who may operate the account, so it is changed by a decision of the board under the articles, not by the departing director’s agreement. Leaving the board does not by itself take a person off the mandate: the company must tell the bank, cancel their online access and cards, and notify Companies House within 14 days. Where directors disagree over access, the board majority decides, and an unresolved deadlock is broken by the shareholders or the court.

Who controls the company’s bank mandate?

The company does, acting through its directors. Under article 3 of the model articles for private companies, the directors are responsible for managing the company’s business and may exercise all the powers of the company. Opening an account and deciding who may sign on it is part of that management. Article 5 lets the directors delegate their powers to any person, on such terms as they think fit, and article 5(3) lets them revoke a delegation in whole or in part. Naming signatories on a mandate is in substance a delegation of that kind, which the board can withdraw.

Decisions are taken collectively. Article 7 requires a majority decision at a meeting or a unanimous decision under article 8, and article 7(2) lets a sole director decide alone where the articles do not require more than one director; see sole director decisions. Shareholders do not run the account directly, but article 4 allows them, by special resolution, to direct the directors to take or refrain from specified action.

The bank’s own mandate form sits on top of this. Banks generally ask for a resolution of the board in their standard wording when an account is opened or the signatories change, and the board decision should be recorded in the minutes, which section 248 requires the company to keep for at least ten years. See writing board minutes.

Does a director come off the mandate automatically when they leave the board?

No. Ceasing to be a director and ceasing to be a bank signatory are separate steps. A director stops holding office when, for example, their resignation takes effect under article 18(f) of the model articles, or when the shareholders remove them by ordinary resolution under section 168 of the Companies Act 2006, which applies notwithstanding anything in any agreement between the company and the director. See resigning as a director and removing a director under section 168.

The bank only knows what it is told. If the mandate names the individual and nobody instructs the bank, their card, online banking login and signing rights may continue to work. Their authority from the company has ended, but the bank may not know that. The company therefore needs to send the bank a mandate change, approved by the remaining board, as soon as the departure takes effect, and ideally have it ready beforehand.

Separately, section 167G requires the company to give notice to the registrar when a person ceases to be a director, specifying the date, within the period of 14 days beginning with the day the person ceased to be a director. That filing is about the public register. It does not change anything at the bank.

What steps should the company take when a director leaves?

  1. Hold a board meeting, or take a written decision, removing the person as a signatory and appointing any replacement, using the bank’s form of resolution where it has one.
  2. Submit the bank’s mandate change form, signed by the people the existing mandate requires.
  3. Cancel the person’s online banking credentials, security devices and company cards, and change any shared passwords.
  4. Review every other place company money can be moved: savings accounts, foreign currency accounts, card terminals, payment platforms and payroll or supplier payment software.
  5. Check whether payments above a set amount need two approvers and, if so, that two people still can approve.
  6. File the termination of appointment at Companies House within 14 days.
  7. Record each step in the minutes.

Can a director refuse to be taken off the mandate?

A director who is still in office has a vote on the board decision, but under article 7 the majority decides. Once they have left the board, they have no say as a director at all. What a departing director may have is a separate right as a shareholder, or a contractual right under a shareholders’ agreement, for example a requirement that certain decisions need their consent. Those rights do not usually extend to keeping personal access to the company’s account after leaving office.

If a director who is also a shareholder believes they have been excluded unfairly, the remedy is a petition under section 994 on the ground that the company’s affairs are being conducted in a manner that is unfairly prejudicial to their interests as a member. That is a claim about how the company is run; it does not give them interim control of the bank account. See minority shareholder protection.

What happens if the directors are deadlocked over the account?

With two directors who disagree, neither can form a majority. Article 13 gives the chair a casting vote if the numbers are equal, but only if a chair has been appointed and is not excluded from voting on the matter. Without a casting vote, the board cannot validly change the mandate, and in practice a bank receiving conflicting instructions from different directors will often restrict the account until the dispute is resolved, which can stop the company paying wages and suppliers.

The ways out are:

  • the shareholders removing one director under section 168 or appointing an additional director to give the board a working majority;
  • the shareholders using the article 4 reserve power, by special resolution, to direct the directors;
  • an application to court, including an unfair prejudice petition, where the shareholders are themselves split.

If the company is insolvent and a winding up order is made, section 127 of the Insolvency Act 1986 makes any disposition of the company’s property after the commencement of the winding up void unless the court orders otherwise, which is why banks become very cautious once a petition is known about. More on stalemates is in shareholder deadlock.

What rights does a removed director keep over company money and records?

Very few. Section 388(1)(b) keeps the accounting records open to inspection by the company’s officers, so a serving director can insist on seeing bank statements. That right is tied to office and is lost on leaving. A shareholder has no right to inspect accounting records merely because they are a shareholder under article 50 of the model articles.

Duties continue in part. Under section 170(2) a former director stays bound by the duty to avoid conflicts as regards property, information or opportunities learned while in office. A former director who moves company money after leaving has no authority to do so, and if the company later goes into liquidation, section 212 of the Insolvency Act 1986 lets the liquidator ask the court to compel any person who is or has been an officer and who has misapplied or retained company money to repay it.

Leaving the board does not by itself release a personal guarantee the director gave the bank for the company’s borrowing. That depends on the guarantee’s own terms, and the departing director should raise it with the bank directly.

How might this look for a real company?

Illustration only. Three directors run a design company. The shareholders remove Chris at a general meeting on 3 March under section 168. The same afternoon the remaining two directors resolve to remove Chris from the mandate and add the finance manager as second signatory for payments over a set limit. They email the signed bank form, cancel Chris’s card and online token through the business banking portal, and minute both steps.

On 4 March Chris tries to log in and is refused. The company files the termination of his appointment at Companies House on 10 March, inside the 14 day period, which began on 3 March. Had the bank not been told, and Chris had paid himself a sum he claimed was owed, the company would have had to recover it from him, by action or later through a liquidator.

What mistakes come up most often?

  • Filing the Companies House form and assuming the bank has been told.
  • Updating the main current account but forgetting savings accounts, card terminals and payment platforms.
  • Changing the mandate without a valid board decision, for example one director acting alone when the articles require a majority.
  • Leaving a single remaining signatory where the mandate requires two, so nobody can make payments.
  • A departing director treating continued access as leverage in a dispute, which exposes them personally.
  • Not minuting the decision, leaving no evidence of when authority ended.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.