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Appointment of Directors

Company Law Solutions can provide advice, documents and forms for the appointment, resignation and removal of a director.

Abolition of corporate directors

By new sec156A, sec156B and sec156C of CA 2006 (inserted by sec87 of the Small Business, Enterprise and Employment Act 2015) only natural persons may be company directors. This is subject to any regulations made under these provisions, though these must provide that a company must have at least one natural person as a director. Any corporate director in office when these provisions come into effect must cease to be a director 12 months after the provisions come into effect. These provisions are expected to come into effect in April 2016.

First directors

The first directors are appointed by the subscribers to the memorandum and are named on form IN01 which is registered at Companies House when the company is formed. They automatically take office on the date of incorporation: sec16(6) CA 2006. Their names and other details should be entered in the register of directors once the company is formed: CA 2006, sec162.

Subsequent directors

Subsequent directors must be appointed in accordance with the provisions in the company's articles of association

The Model Articles (for companies registered after 1.10.2009) prescribe that:

Any person willing to be appointed by a director, and permitted by law to do so can be appointed by ordinary resolution of a general meeting or by resolution of the directors. (Article 17). 

Table A, (for companies registered pre-1.10.2009 provides that the general meeting may appoint directors (but note the procedures in TA 76-77). The directors may appoint a director under Article 79 of Table A, but such an appointee holds office only until the next AGM. (Article 78)

By CA 2006, sec161(1), in a PLC, separate resolutions are required for each director, unless a resolution to appoint two or more persons by single resolution has been agreed by the meeting without any vote cast against it.

Powers to nominate directors

Although not in the Model Articles or Table A, a company's articles may confer powers of nomination or appointment on other people or bodies, e.g.:
a holding company may be given power to appoint directors to a subsidiary company;
a particular debenture holder or shareholder may be given power to appoint one or more directors, etc

Notification to Companies House

The first directors are named on form IN01 on registration of the company. Any subsequent appointment must be notified to Companies House on form AP01 and the company's own register of directors must be completed to show the director's details.

Consent to act as director or secretary

Sec100 of the Small Business, Enterprise and Employment Act 2015 changes the means by which Companies House is notified on the appointment of a director or secretary that the appointed person has consented to act. The previous requirement that the appointee should sign a consent box on the form notifying their appointment has been replaced by a statement on behalf of the company (or on formation, the subscribers to the company) that the person has so consented. This is largely a bi-product of the change to electronic registration of documents, but applies whether the notification is made electronically or on a paper form.

By new sec1079B CA 2006 Companies House must write to any person notified to it as being appointed as a director of a company, informing the appointee of that fact. The notice may be sent by post or electronically.

Removal from register of material about directors

Expected implementation: April 2016

Sec102 of the Small Business, Enterprise and Employment Act 2015 amends CA 2006, sec1095 so that a person who has been notified to Companies House as being a director of a particular company can apply to that body stating that he did not consent to act and requesting that the register be amended to remove the offending material. Companies House must amend the register unless the company produces sufficient evidence that the person did in fact consent to the appointment.

Information about dates of birth

By sec96 of the Small Business, Enterprise and Employment Act 2015 Part 35 of the Companies Act 2006 (the registrar of companies) is amended so that the actual day of a person’s date of birth will not appear on the part of the register open to the public even though the full date must still be supplied on such forms as require a date of birth (such as on the appointment of a director, etc). Companies House is authorised to supply the full date of birth to certain public bodies and credit referencing agencies. See also The Companies (Disclosure of Date of Birth Information) Regulations 2015/1694.

Directors' service contracts

Note also that the company may wish to give the director a service contract, so making him or her an employee. Subject to the company's articles, the board has power (as part of its general powers of management) to award service contracts to directors and others. A copy of the contract must be available for inspection at the registered office (sec228 CA), and all members have a right to inspect it (sec229). Like all directors' powers, granting a service contract must be done bona fide for the benefit of the company. 

Company Law Solutions can provide advice, documents and forms for the appointment, resignation and removal of a director.