How are directors appointed?

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The first directors are appointed by the subscribers to the memorandum and are named on form G 10 which is registered at Companies House when the company is formed. They automatically take office on the date of incorporation. Their names and other details should be entered in the register of directors once the company is formed: CA 1985, s 10 and sec13 (5).

Subsequent directors are appointed in accordance with the company's articles. Table A, article 78 provides that the general meeting may appoint directors (but note the procedures in TA 76-77).

By CA 1985, sec292, in a PLC, separate resolutions are required for each director. By sec293, in a PLC or the subsidiary of a PLC, special notice of the director's age is required if the director is 70 or older. Such a person must disclose her/his age: sec294.

The directors may appoint a director under article 79 of Table A, but such an appointee holds office only until the next AGM.

Any appointment must be notified to Companies House on form 288a and the company's own register of directors must be completed to show the director's details. Form 288a can be downloaded from the forms section of the club library.

Although not in 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.

Note also that the company may wish to give the director a service contract. 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. Note, however, that CA 1985, sec319 requires any fixed term contract of more than five years' duration (which cannot be terminated by notice) to be approved by an ordinary resolution in general meeting. Like all directors' powers, granting a service contract must be done bona fide for the benefit of the company.

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