In the UK, there are rules as to who can be a company director. These are set out in the Companies Act 2006. Firstly, every registered limited company needs to have at least one person appointed as a company director, and in the case of a PLC, there needs to be at least two.
Company Directors- Who can be one?
In the case of a small business, shareholders can be company directors, however there are few restrictions in regards to who can be a shareholder. In the case of company directors, there are more regulations to be adhered to.
The 2006 Companies Act stipulates that at least one of the company directors must be a real person. You would think this was an obvious rule, however this was only introduced in 2008 due to the fact that an increasing amount of companies were not using a ‘natural’ person as a director. Previously, company owners could set up a company, which were registered with other companies as the sole director. This resulted in it being very difficult to track the people behind them.
Anyone who wishes to be a company director needs to be at least 16 years old. It is recommend not to have anyone under the age of 18 in a position such as this. This is due to the fact that 18 is the age where a person is legally recognized as an adult and is responsible for any legal obligations created by their actions. If you have a director under the age of 18 you may have problems with contracts.
Who cannot be a Company Director?
There are two reasons that a person will not be able to become a company director. First if you have bankruptcy proceedings active against you. This is known as being an ‘undischarged bankrupt’. In this instance it is possible to apply to the courts for an exemption from being an undischarged bankrupt, however the success rates for these applications are low.
Another reason is if the courts have disqualified you from being a company director. This could be due to a number of reasons, but the main ones are fraud, consistently breaching company laws and failing to keep proper records. In this instance you could normally be disqualified from between 2 to 15 years. Again it is possible to apply to the courts for an exemption as they are possible, but rare.
In summary, as long as you are over the age of 16 and no UK court proceedings have been taken out against you, then you are eligible to be a company director.
