Almost anyone can be a director of a UK limited company. There are very few barriers to appointment, which makes company formation an accessible option for many people. Whilst no specific qualifications are required, the role of company director does involve a great deal of responsibility, so there are certain restrictions to be aware of.
To be appointed as a company director, an individual must:
- be at least 16 years old
- not be an undischarged bankrupt
- not be a disqualified director
Although the minimum age requirement is 16, it is recommended that under 18s are not appointed as directors. This is because people are only legally recognised as adults in the UK once they reach their 18th birthday, so any contracts signed by a director below the age of 18 could be challenged.
Do company directors need to live in the UK?
There are no limitations on where the director of a UK company lives. They do not have to be a UK resident, nor do they have to be a UK national. Their service address (official correspondence address), which is listed on the Companies House public register, can also be situated anywhere in the world.
Can a company be a director of another company?
Corporate bodies (i.e., companies, partnerships, organisations, etc) can also be directors of other companies, as long as the companies they are appointed to have at least one human director. Companies with corporate directors and no human directors are in ‘default’ and liable to be struck off by Companies House.
Please be aware, however, that a ban on corporate directors is expected to be implemented in the near future. Companies with corporate directors should monitor the status of this ban going forward.
Who cannot be a company director?
An undischarged bankrupt (someone who is under the financial restrictions of the bankruptcy process) cannot be a company director, unless they have permission from the courts. Once the bankruptcy has been discharged by the courts, which usually occurs after one year, the individual may be appointed as a company director.
A disqualified director is also prohibited from being appointed as a company director for the duration of their disqualification term. In some cases, however, the courts will permit a disqualified person to be appointed as a company director.
The Company Directors Disqualification Act 1986 provides that a person can be disqualified from being a director or taking part in the promotion, formation, or management of a company for up to fifteen years.
One reason for director disqualification is being convicted of a criminal offence in connection with the company. Another reason is where a person has been convicted of an offence involving a failure to file the company’s annual accounts or confirmation statement with Companies House.
Finally, you cannot be a director of a UK company if you are also the auditor of that company. This is to avoid the potential for any conflict of interest.
Whilst other corporate entities can be appointed to act as a director of a company, the Companies Act 2006 states they can only do so when there is at least one other human appointed as a director to that company as well. Companies with corporate directors and no human directors are in ‘default’ and liable to be struck off by Companies House.
It should be noted that corporate directors have been technically outlawed, but that the ban is not yet in force. Companies with corporate directors should monitor the status of this ban going forward.