What is a company director?

A company director is a person who is appointed to run a company on behalf of its members (shareholders or guarantors). They are legally responsible for the company and its actions, attempting to make it a success, and ensuring all legal administrative functions are maintained. Often, directors are also members.

Who can be a company director?

Almost any individual can be a company director, provided they

  • are at least 16 years old
  • are not under bankruptcy restrictions or prohibited by a Debt Relief Order
  • have not been disqualified (banned) from acting as a company director

Currently, companies can be appointed as 'corporate' directors of other companies, but the government has plans to ban this in the near future.

How many directors do I need to set up a limited company?

Under the Companies Act 2006, a UK limited company requires at least one natural person (i.e., human, not corporate) to be appointed as a director when a company is incorporated and for its entire existence.

The company's articles may specify a higher minimum, and there is no statutory limit to the maximum number of directors a company has.

Do I have to live in the UK to become a director?

There is no legal requirement to be a UK citizen or live in the UK to be a director of a UK limited company. However, in some cases, a non-resident director may still have to pay tax in the UK on any earnings received from the company.

Can a director be another company?

Currently, a company or other corporate body can be the director of another company, but it cannot be the only director. There must be at least one natural (human) director appointed at all times.

The UK government is planning to implement a ban on corporate directors, legislated under the Small Business, Enterprise and Employment Act 2015. As yet, no date has been given for the enforcement of this ban.

Does a director have to be a shareholder in the company?

Unless it's a requirement under the articles of association, a director does not have to be a shareholder in the company they run, nor does a shareholder have to be a director. However, they can be, and it is quite common for directors and shareholders to be the same people, especially in smaller companies.

Does a director own the company?

A director does not own the company. Shareholders (members) own the company by taking shares, and directors run the company on behalf of these members. These are two very distinct roles, but it is commonplace for directors to also be shareholders.

What are the main responsibilities of a director?

A director is responsible for running a company honestly and lawfully, in accordance with the Companies Act 2006 and the articles of association. This includes managing day-to-day business activities and finances, making decisions for the benefit of the company and members, and fulfilling all legal administrative functions, like filing accounts and confirmation statements.

Can I appoint a new director after company formation?

New directors can be appointed any time after company formation, in line with the articles of association. Typically, existing directors can approve the appointment, but sometimes the articles restricts this power to members. There is usually no upper limit to the number of directors that can be appointed, unless a specific provision is added to the articles.

Can I remove a director from my company?

Depending on the circumstances, a director can be removed from a company by a majority vote of the members (or directors, if permitted by the articles) or disqualified by the court or a governing body if deemed 'unfit'. Any removal must be in line with the director's contract and/or shareholders' agreement, otherwise they may be entitled to damages.

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