(1) A private company must have at least one director.
(2) A public company must have at least two directors.
(1) A company must have at least one director who is a natural person.
(2) This requirement is met if the office of director is held by a natural person as a corporation sole or otherwise by virtue of an office.
(1) If it appears to the Secretary of State that a company is in breach of—
section 154 (requirements as to number of directors), or
section 155 (requirement to have at least one director who is a natural person),
the Secretary of State may give the company a direction under this section.
(2) The direction must specify—
(a) the statutory requirement the company appears to be in breach of,
(b) what the company must do in order to comply with the direction, and
(c) the period within which it must do so.
That period must be not less than one month or more than three months after the date on which the direction is given.
(3) The direction must also inform the company of the consequences of failing to comply.
(4) Where the company is in breach of section 154 or 155 it must comply with the direction by—
(a) making the necessary appointment or appointments, and
(b) giving notice of them under section 167,
before the end of the period specified in the direction.
(5) If the company has already made the necessary appointment or appointments (or so far as it has done so), it must comply with the direction by giving notice of them under section 167 before the end of the period specified in the direction.
(6) If a company fails to comply with a direction under this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
For this purpose a shadow director is treated as an officer of the company.
(7) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
(1) A person may not be appointed a director of a company unless he has attained the age of 16 years.
(2) This does not affect the validity of an appointment that is not to take effect until the person appointed attains that age.
(3) Where the office of director of a company is held by a corporation sole, or otherwise by virtue of another office, the appointment to that other office of a person who has not attained the age of 16 years is not effective also to make him a director of the company until he attains the age of 16 years.
(4) An appointment made in contravention of this section is void.
(5) Nothing in this section affects any liability of a person under any provision of the Companies Acts if he—
(a) purports to act as director, or
(b) acts as a shadow director,
although he could not, by virtue of this section, be validly appointed as a director.
(6) This section has effect subject to section 158 (power to provide for exceptions from minimum age requirement).
(1) The Secretary of State may make provision by regulations for cases in which a person who has not attained the age of 16 years may be appointed a director of a company.
(2) The regulations must specify the circumstances in which, and any conditions subject to which, the appointment may be made.
(3) If the specified circumstances cease to obtain, or any specified conditions cease to be met, a person who was appointed by virtue of the regulations and who has not since attained the age of 16 years ceases to hold office.
(4) The regulations may make different provision for different parts of the United Kingdom.
This is without prejudice to the general power to make different provision for different cases.
(5) Regulations under this section are subject to negative resolution procedure.
(1) This section applies where—
(a) a person appointed a director of a company before section 157 (minimum age for appointment as director) comes into force has not attained the age of 16 when that section comes into force, or
(b) the office of director of a company is held by a corporation sole, or otherwise by virtue of another office, and the person appointed to that other office has not attained the age of 16 years when that section comes into force,
and the case is not one excepted from that section by regulations under section 158.
(2) That person ceases to be a director on section 157 coming into force.
(3) The company must make the necessary consequential alteration in its register of directors but need not give notice to the registrar of the change.
(4) If it appears to the registrar (from other information) that a person has ceased by virtue of this section to be a director of a company, the registrar shall note that fact on the register.
(1) At a general meeting of a public company a motion for the appointment of two or more persons as directors of the company by a single resolution must not be made unless a resolution that it should be so made has first been agreed to by the meeting without any vote being given against it.
(2) A resolution moved in contravention of this section is void, whether or not its being so moved was objected to at the time.
But where a resolution so moved is passed, no provision for the automatic reappointment of retiring directors in default of another appointment applies.
(3) For the purposes of this section a motion for approving a person’s appointment, or for nominating a person for appointment, is treated as a motion for his appointment.
(4) Nothing in this section applies to a resolution amending the company’s articles.
(1) The acts of a person acting as a director are valid notwithstanding that it is afterwards discovered—
(a) that there was a defect in his appointment;
(b) that he was disqualified from holding office;
(c) that he had ceased to hold office;
(d) that he was not entitled to vote on the matter in question.
(2) This applies even if the resolution for his appointment is void under section 160 (appointment of directors of public company to be voted on individually).
(1) Every company must keep a register of its directors.
(2) The register must contain the required particulars (see sections 163, 164 and 166) of each person who is a director of the company.
(3) The register must be kept available for inspection—
(a) at the company’s registered office, or
(b) at a place specified in regulations under section 1136.
(4) The company must give notice to the registrar—
(a) of the place at which the register is kept available for inspection, and
(b) of any change in that place,
unless it has at all times been kept at the company’s registered office.
(5) The register must be open to the inspection—
(a) of any member of the company without charge, and
(b) of any other person on payment of such fee as may be prescribed.
(6) If default is made in complying with subsection (1), (2) or (3) or if default is made for 14 days in complying with subsection (4), or if an inspection required under subsection (5) is refused, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
For this purpose a shadow director is treated as an officer of the company.
(7) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
(8) In the case of a refusal of inspection of the register, the court may by order compel an immediate inspection of it.
(1) A company’s register of directors must contain the following particulars in the case of an individual—
(a) name and any former name;
(b) a service address;
(c) the country or state (or part of the United Kingdom) in which he is usually resident;
(d) nationality;
(e) business occupation (if any);
(f) date of birth.
(2) For the purposes of this section “name” means a person’s Christian name (or other forename) and surname, except that in the case of—
(a) a peer, or
(b) an individual usually known by a title,
the title may be stated instead of his Christian name (or other forename) and surname or in addition to either or both of them.
(3) For the purposes of this section a “former name” means a name by which the individual was formerly known for business purposes.
Where a person is or was formerly known by more than one such name, each of them must be stated.
(4) It is not necessary for the register to contain particulars of a former name in the following cases—
(a) in the case of a peer or an individual normally known by a British title, where the name is one by which the person was known previous to the adoption of or succession to the title;
(b) in the case of any person, where the former name—
(i) was changed or disused before the person attained the age of 16 years, or
(ii) has been changed or disused for 20 years or more.
(5) A person’s service address may be stated to be “The company’s registered office”.
A company’s register of directors must contain the following particulars in the case of a body corporate, or a firm that is a legal person under the law by which it is governed—
(a) corporate or firm name;
(b) registered or principal office;
(c) in the case of an EEA company to which the First Company Law Directive (68/151/EEC) applies, particulars of—
(i) the register in which the company file mentioned in Article 3 of that Directive is kept (including details of the relevant state), and
(ii) the registration number in that register;
(d) in any other case, particulars of—
(i) the legal form of the company or firm and the law by which it is governed, and
(ii) if applicable, the register in which it is entered (including details of the state) and its registration number in that register.
(1) Every company must keep a register of directors' residential addresses.
(2) The register must state the usual residential address of each of the company’s directors.
(3) If a director’s usual residential address is the same as his service address (as stated in the company’s register of directors), the register of directors' residential addresses need only contain an entry to that effect.
This does not apply if his service address is stated to be “The company’s registered office”.
(4) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
For this purpose a shadow director is treated as an officer of the company.
(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
(6) This section applies only to directors who are individuals, not where the director is a body corporate or a firm that is a legal person under the law by which it is governed.
(1) The Secretary of State may make provision by regulations amending—
section 163 (particulars of directors to be registered: individuals),
section 164 (particulars of directors to be registered: corporate directors and firms), or
section 165 (register of directors' residential addresses),
so as to add to or remove items from the particulars required to be contained in a company’s register of directors or register of directors' residential addresses.
(2) Regulations under this section are subject to affirmative resolution procedure.
(1) A company must, within the period of 14 days from—
(a) a person becoming or ceasing to be a director, or
(b) the occurrence of any change in the particulars contained in its register of directors or its register of directors' residential addresses,
give notice to the registrar of the change and of the date on which it occurred.
(2) Notice of a person having become a director of the company must—
(a) contain a statement of the particulars of the new director that are required to be included in the company’s register of directors and its register of directors' residential addresses, and
(b) be accompanied by a consent, by that person, to act in that capacity.
(3) Where—
(a) a company gives notice of a change of a director’s service address as stated in the company’s register of directors, and
(b) the notice is not accompanied by notice of any resulting change in the particulars contained in the company’s register of directors' residential addresses,
the notice must be accompanied by a statement that no such change is required.
(4) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
For this purpose a shadow director is treated as an officer of the company.
(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
(1) A company may by ordinary resolution at a meeting remove a director before the expiration of his period of office, notwithstanding anything in any agreement between it and him.
(2) Special notice is required of a resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed.
(3) A vacancy created by the removal of a director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy.
(4) A person appointed director in place of a person removed under this section is treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director.
(5) This section is not to be taken—
(a) as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director, or
(b) as derogating from any power to remove a director that may exist apart from this section.
(1) On receipt of notice of an intended resolution to remove a director under section 168, the company must forthwith send a copy of the notice to the director concerned.
(2) The director (whether or not a member of the company) is entitled to be heard on the resolution at the meeting.
(3) Where notice is given of an intended resolution to remove a director under that section, and the director concerned makes with respect to it representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so—
(a) in any notice of the resolution given to members of the company state the fact of the representations having been made; and
(b) send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company).
(4) If a copy of the representations is not sent as required by subsection (3) because received too late or because of the company’s default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.
(5) Copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused.
(6) The court may order the company’s costs (in Scotland, expenses) on an application under subsection (5) to be paid in whole or in part by the director, notwithstanding that he is not a party to the application.
(1) The general duties specified in sections 171 to 177 are owed by a director of a company to the company.
(2) A person who ceases to be a director continues to be subject—
(a) to the duty in section 175 (duty to avoid conflicts of interest) as regards the exploitation of any property, information or opportunity of which he became aware at a time when he was a director, and
(b) to the duty in section 176 (duty not to accept benefits from third parties) as regards things done or omitted by him before he ceased to be a director.
To that extent those duties apply to a former director as to a director, subject to any necessary adaptations.
(3) The general duties are based on certain common law rules and equitable principles as they apply in relation to directors and have effect in place of those rules and principles as regards the duties owed to a company by a director.
(4) The general duties shall be interpreted and applied in the same way as common law rules or equitable principles, and regard shall be had to the corresponding common law rules and equitable principles in interpreting and applying the general duties.
(5) The general duties apply to shadow directors where, and to the extent that, the corresponding common law rules or equitable principles so apply.
A director of a company must—
(a) act in accordance with the company’s constitution, and
(b) only exercise powers for the purposes for which they are conferred.
(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a) the likely consequences of any decision in the long term,
(b) the interests of the company’s employees,
(c) the need to foster the company’s business relationships with suppliers, customers and others,
(d) the impact of the company’s operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
(2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company.
(1) A director of a company must exercise independent judgment.
(2) This duty is not infringed by his acting—
(a) in accordance with an agreement duly entered into by the company that restricts the future exercise of discretion by its directors, or
(b) in a way authorised by the company’s constitution.
(1) A director of a company must exercise reasonable care, skill and diligence.
(2) This means the care, skill and diligence that would be exercised by a reasonably diligent person with—
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company, and
(b) the general knowledge, skill and experience that the director has.
(1) A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
(2) This applies in particular to the exploitation of any property, information or opportunity (and it is immaterial whether the company could take advantage of the property, information or opportunity).
(3) This duty does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company.
(4) This duty is not infringed—
(a) if the situation cannot reasonably be regarded as likely to give rise to a conflict of interest; or
(b) if the matter has been authorised by the directors.
(5) Authorisation may be given by the directors—
(a) where the company is a private company and nothing in the company’s constitution invalidates such authorisation, by the matter being proposed to and authorised by the directors; or
(b) where the company is a public company and its constitution includes provision enabling the directors to authorise the matter, by the matter being proposed to and authorised by them in accordance with the constitution.
(6) The authorisation is effective only if—
(a) any requirement as to the quorum at the meeting at which the matter is considered is met without counting the director in question or any other interested director, and
(b) the matter was agreed to without their voting or would have been agreed to if their votes had not been counted.
(7) Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.
(1) A director of a company must not accept a benefit from a third party conferred by reason of—
(a) his being a director, or
(b) his doing (or not doing) anything as director.
(2) A “third party” means a person other than the company, an associated body corporate or a person acting on behalf of the company or an associated body corporate.
(3) Benefits received by a director from a person by whom his services (as a director or otherwise) are provided to the company are not regarded as conferred by a third party.
(4) This duty is not infringed if the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.
(5) Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.
(1) If a director of a company is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the company, he must declare the nature and extent of that interest to the other directors.
(2) The declaration may (but need not) be made—
(a) at a meeting of the directors, or
(b) by notice to the directors in accordance with—
(i) section 184 (notice in writing), or
(ii) section 185 (general notice).
(3) If a declaration of interest under this section proves to be, or becomes, inaccurate or incomplete, a further declaration must be made.
(4) Any declaration required by this section must be made before the company enters into the transaction or arrangement.
(5) This section does not require a declaration of an interest of which the director is not aware or where the director is not aware of the transaction or arrangement in question.
For this purpose a director is treated as being aware of matters of which he ought reasonably to be aware.
(6) A director need not declare an interest—
(a) if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
(b) if, or to the extent that, the other directors are already aware of it (and for this purpose the other directors are treated as aware of anything of which they ought reasonably to be aware); or
(c) if, or to the extent that, it concerns terms of his service contract that have been or are to be considered—
(i) by a meeting of the directors, or
(ii) by a committee of the directors appointed for the purpose under the company’s constitution.
(1) The consequences of breach (or threatened breach) of sections 171 to 177 are the same as would apply if the corresponding common law rule or equitable principle applied.
(2) The duties in those sections (with the exception of section 174 (duty to exercise reasonable care, skill and diligence)) are, accordingly, enforceable in the same way as any other fiduciary duty owed to a company by its directors.
Except as otherwise provided, more than one of the general duties may apply in any given case.
(1) In a case where—
(a) section 175 (duty to avoid conflicts of interest) is complied with by authorisation by the directors, or
(b) section 177 (duty to declare interest in proposed transaction or arrangement) is complied with,
the transaction or arrangement is not liable to be set aside by virtue of any common law rule or equitable principle requiring the consent or approval of the members of the company.
This is without prejudice to any enactment, or provision of the company’s constitution, requiring such consent or approval.