Sometimes, for tax or other reasons a person does not wish to be seen as associated with a company, or be seen as a beneficiary of a company, Nominee Director Service is the answer.
A nominee director is someone who in fact is renting his or her name to you.
Nominee Director signs the Memorandum and Articles of Association to form your entity.
The nominee will sign a General Power of Attorney document, which gives you full power to manage your company.
The nominee will give you his signed and undated letter of resignation document, which gives you the peace of mind that he can't act against you.
The above information is general and is intended as a summary only.
Clients should seek further clarification if required before deciding if they wish to engage nominee directors.
We expressly reserve the right to provide this service to anyone for any reason.
With this package we will provide a private individual, who is a citizen of the EU, as the nominee director for your company.
We will also provide a dully signed general power of attorney empowering you to run the business, and manage the company's activities, and you will take full legal and financial responsibility for the running of the company.
This package also includes a pre-signed, undated letter of resignation from the nominee director. *If signatures or verification of documents is required, additional charges will apply.
With this package we will provide a private individual, who is a citizen of the EU, as the nominee director for your company.
We will also provide a dully signed, notarised and apostilled power of attorney empowering you to run the business, and manage the company's activities, and you will take full legal and financial responsibility for the running of the company.
This package also includes a pre-signed, undated letter of resignation from the nominee director. *If signatures or verification of documents is required, additional charges will apply.
With this package we will provide a private individual, who is a citizen of the UK, as the nominee director for your company.
We will also provide a notarised and apostilled power of attorney empowering you to run the business, and manage the company's activities, and you will take full legal and financial responsibility for the running of the company.
This package also includes a pre-signed, undated letter of resignation from the nominee director. *If signatures or verification of documents is required, additional charges will apply.
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Appointing the Directors of the Company
. Under section 303, shareholders may by ordinary resolution (i.e. a simple majority of those present in person or by proxy at a meeting of the company and voting in favour) remove a director at any time. This is not withstanding any provision in the company's Articles of Association or in any service or other agreement. Shareholders may at the meeting at which they remove a director appoint another person as director in his or her place. Section 303(2) requires special notice within section 379Companies Act 1985 to be given of the resolution to remove the director. This means that notice of the intention to move the resolution must be given to the Company at least 28 days before the meeting at which it is moved. As the company's sole director, the person (or entity) will be responsible for managing the business and affairs of the company and for ensuring, along with the company secretary (or secretaries) that the company complies with the Companies Act 1985. How many? Every private limited company needs to have at least one director and a secretary.
Furthermore the sole director of the company: need not be a natural person - a British, Scottish, Irish company or any foreign firm may be appointed as a director of another company. This is implicit in various provisions of the Companies Act 1985 (e.g. sections 289(1) and 305(4)). Need not have any special formal qualifications; must not have been disqualified by a court from acting as a company director (unless he or she has been given leave (permission) by a court to act as a director for a particular company). Must not be an undischarged bankrupt (except with leave of the court) - section 11(1) of the Company Directors Disqualification Act 1986; in the case of a company proposed to be registered in Scotland (as opposed to 'England and Wales') - must not be under the age of 16 - section 1(1)(a) of the Age of Legal Capacity (Scotland) Act 1991.
In the case of a company proposed to be registered in England and Wales (as opposed to Scotland) - need not be of any particular minimum age, however, careful consideration should be given as to whether a proposed member / director who is a minor, has the legal capacity to consent to act as a director and to carry out the duties of a company director. Need not be younger than any particular age (i.e. there is no maximum age limit) unless the proposed company is to be a subsidiary of a public company. (If the private company is to be a subsidiary of a public company, a director of the subsidiary must not be over the age of 70 unless specifically approved by a general meeting of the company - section 293 of the Companies Act 1985. The word 'subsidiary' is defined in sections 736 and 736A of the Companies Act 1985.). May be a non-British national - however, it is possible that UK immigration laws may restrict the work activities which such a director may undertake whilst in the UK.
Choose one of the following packages that will best serve you:
UK COMPANY DIRECTORS. APPOINTMENT OF DIRECTOR. DIRECTOR'S APPOINTMENT AND REMOVAL
Every company must have formally appointed company officers at all times. This means at least one director and a company secretary for a private limited company, and at least two directors and a company secretary for a public limited company. The director, or directors, must manage the company's affairs in accordance with its articles of association and the law. Certain responsibilities apply to all directors, whether executive or non-executive, and to all types of company whether trading or not. The company secretary is the chief administrator of the company.
A limited company's sole director cannot also be the company secretary. Although, the same person can be both director and company secretary provided there is another company director. A company director is appointed to manage the affairs of a company in accordance with its articles of association and company law. Anyone can become a company director unless: "you are an undischarged bankrupt or disqualified by a court from holding a directorship, unless given leave to act in respect of a particular company or companies". There is no minimum age limit in the companies act for a UK company director to be appointed in England and Wales. However, he or she must be able to consent to their own appointment. Finding and Using Information on This Page:Company Director Appointment Checklist | Status of Directors | Registering the Appointment | 'Register' of Interests in Contracts |
Important Links
Coddan is one of the foremost and most economical providers of company formation and online company registration services in the UK. We offer you Company Formation in England & Wales Scotland and Northern Ireland. To start with corporation tax rates are much lower than income tax rates. Finally, registering a company with your spouse allows you to split your income which almost always results in a lower tax bill. We incorporate over 95% of our companies within 6 hours. Electronic submission of information means that we can register a company with the required director, secretary, registered office and shareholders. When first setting-up a business there are many issues to consider. You need to decide whether or not to incorporate your business, and to choose a structure for your business. There are several types of legal business entities which you can choose to operate as. For more information on these choices, follow the links below. We advise that professional legal and financial advice is obtained before a final choice of business entity is made.
Coddan is a leading service provider in the field of English, Scottish and Irish company formation and company registration. We can help you in starting a business in England & Wales Scotland and Northern Ireland. Over 95% of our companies are incorporated within 6 hours. The electronic submission of information enables a fast company start-up satisfying all of the required legal formalities: a director, a secretary, a registered office and shareholders. Our electronic filing software has been approved by Companies House (Companies House (Companies Registry, Secretary of State) is an Executive Agency of the United Kingdom Government Department of Trade and Industry (DTI)).
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COMPANY DIRECTOR APPOINTMENT CHECKLIST
The following checklist seeks to highlight the areas that a new director should have confirmed:
What are the terms of appointment, service agreement, duties, reporting structure, etc.? How is the appointment evidenced? - Check authority. How are payments of fees, expenses etc., made?
Obtain a copy of latest accounts and management accounts (and any supplementary information) to enable appointee to consider financial state of company. Obtain a copy of the Articles of Association to determine the powers (and restriction of powers) of directors and officers, and a copy of the minutes of the board for the previous year and company for previous five years to check: a) compliance and b) alterations to Articles.
NB: This check will also provide valuable background information on the tactics and strategy adopted by the board, disclose any authorities granted by the board on an individual or committee basis, which may require further investigation, etc.
Check file regarding filing of documentation with Registrar of Companies. Check provision of statutorily required information. Check statutory books for up-to-date entries. Obtain copy of directors' and officers' liability insurance policy and of renewal note. Check if the Articles grant an indemnity against personal costs and liabilities incurred as a result of acting as an officer of the company. Obtain a copy of all loan notes, guarantees, charges, etc.
Check any requirement for qualification shareholding, and, if so, acquire such shares (avoiding any price-sensitive periods). NB: if the Articles require a qualification shareholding which the director fails to take up, the appointment is invalid, but the appointee can be held liable for acts undertaken until the share qualification is acquired.
Prepare a list of companies and/or matters in which the appointee has an interest, and with which the company may be trading or negotiating. These potential conflicts of interest must be disclosed within five days of appointment (and subsequently when they arise). Whether they are allowed to subsist, and/or the director can vote on any such matter (or even form part of the quorum during the discussion), and/or take any profit made from such interests must be checked with the Articles.
Check other board members' interests are noted and what they are. Establish whether any shadow director(s) exist(s), and, if so attempt to ensure that their details are recorded in the various registers, etc. Request a copy of any code of ethics or equivalent applicable to directors and/or senior members of the management of the company.
Request a schedule of board meetings and arrangements for obtaining information for discussion/decision at such meetings. The Articles should be consulted to check what is required to make a correct appointment. In most cases a director's appointment can be made only at a properly convened and constituted board meeting.
WARNING: It can be embarrassing (to say the least) for a company to attempt to appoint to its board a person who has been disqualified from so acting. It may be prudent for the company secretary discreetly to check the Register of Disqualified Persons (held and updated by the Registrar of Companies).
Not all directors involved in failed companies are disqualified and to provide such "track record" information, the business information/credit agency Experian (www.experian.com/bi) maintains a database showing whether directors have previously been involved in such companies.
STATUS OF DIRECTORS
Nowhere in legislation is the term director defined. Various descriptions of directors are used - often without full appreciation of the implications of such names.
Executive: A member of the board authorised to carry out certain day-to-day functions including entering into contracts and managing staff and assets. Such a person is almost certainly an employee as well as an officer and the paperwork concerning their appointment should reflect this.
Non-Executive: Most company boards consist predominantly of fulltime executives. Since it can be difficult for such executives to retain the overall and objective view of the company that their duties as directors require, it has become increasingly common to appoint non-executive directors to boards. Drawn from senior management (and often retired former directors) from other industries, these directors have no executive responsibilities, but provide executive directors with advice and input based on their experience. Since they do not depend for their living on the salary drawn from so acting, they can be far more objective regarding the progress (or lack of progress) of the company, and, in essence, require answers to questions the executive directors may least want asked. It is also easier for such a director to question the legality or appropriateness of certain actions.
For example, in the Guinness affair the "wrongdoing" of certain of the executive directors, was eventually challenged by the non-executive directors. Should the actions complained of continue, non-executive directors will find it easier to resign in protest, with possible attendant publicity, not least since they will not normally be dependent on their income from the company. Non-executive directors rank equally with (and have exactly the same responsibilities as) other directors in all respects. Both the Institute of Directors and the Stock Exchange are very much in favour of the extension of the non-executive director concept, whilst draft legislation from the European Union calls for there to be a majority of non-executive directors on the boards of all listed PLCs.
Chairman: A member of the board, executive or non-executive, elected to chair the board by the board members. Although often described as such, the chairman is not chairman of the company but simple of the board and, depending on the wording of the Articles Of Association, may be chairman of the board only "for the time being".
Managing Director (Chief Executive): In many organisations the functions of chairman and managing director are vested in one person. There has been criticism of this practice, critics inferring that the concentration of power in one person's hands is detrimental to the overall control of the company. However, research seems to suggest that the retention of the twin powers in one person tends to improve the performance of companies, compared to those where the functions are split.
Where there is a separate managing director function, it is more usual for the chairman to be non-executive and to look outwards and interface with external parties, leaving the managing director to ensure other board members and management who report to him/her carry out the requirements of the board and their own responsibilities - that is essentially an internal role.
However, it is difficult to be precise about this since companies operate in different ways - e.g. letting the managing director assume a greater external role, whilst the Chairman adopts a lower profile.
To a certain extent this is inevitable since the personalities and talents of the persons themselves may well affect the range of duties they undertake. Legally the managing director may be in a different position from every other director and his powers, responsibilities and provision of his re-election need to be checked in the Articles of Association. Under some Articles, a proportion (often a third) of the directors must retire at each Annual General Meeting of the company shareholders and seek re-election by those shareholders at that meeting. A managing director, however, is often excluded from this requirement.
Alternate Directors: Act as a proxy for the appointee and have the right to receive all data and items sent to other directors. A director is legally entitled to appoint an alternate but only if it is allowed under his company's Articles and the appointment is usually made subject to the agreement of the rest of the board.
Associate or Local Directors: If allowed by the Articles, a company may be able to grant to an employee the rank of "director" to indicate that the person carries a high level of authority. Such people are not usually company directors and they should not use the title in such a way as to suggest that they are.
Courtesy titles such as "Director of ..." may be used to grant a level of authority to a person who is not a board member and may not even be an employee.
Nominee Directors: Are sometimes appointed by (for example) a major shareholder who wishes to exercise some control over the board and company. Nominee directors owe obligations to two separate bodies and may need to take care to avoid conflicts of interests. A nominee director may have enhanced voting rights (e.g. a vote exercised by a nominee may rank greater than the combined votes of all other members). In such a case the company may be regarded as a subsidiary of the shareholder appointing the nominee director, with all the implications that such a relationship entails.
Sole Director: Since the 1989 Companies Act came into effect companies have been allowed to have just one shareholder. LTD companies have always been allowed to have just one director (although a sole director cannot also be company secretary). It is perfectly legal for the sole shareholder to appoint himself sole director. However, there is an inherent danger in that if the director dies or unable to act in some other way, there is no shareholder to replace the director and the company will be unable to continue to trade until the ownership of the share(s) is determined - something that could take several weeks at least.
Silent or Sleeping Directors: Directors have a duty of care from which they cannot be absolved. If a person accepts the appointment of director he accepts full legal liability for the actions of the company. If he fails to attend board meetings he still has such liability even though he may have no knowledge of what is going on. Basically it is impossible for a director to delegate his responsibility (and liability) for operating the company. Ignorance of what is going on (as of the law) is no excuse.
REGISTERING THE APPOINTMENT
Register of Directors and Secretaries: The first directors and secretary are required to complete Form 10 and send it to the Registrar. Thereafter each director/secretary is required to complete Form 288(a) and arrange for it to be filed with the Registrar within fourteen days of their appointment. As well as signing to indicate their consent to act (to ensure that the director knows of the appointment) full personal details as required (including any former name) must be given. Failure to provide such personal data is an offence subject to an initial plus a daily fine.
These details include private addresses, which are needed in case the Registrar requires to serve official notice (e.g. for failure to file accounts, etc.). Despite this there is a preference amongst some directors to try not to disclose their private address. This breaches company law. There are proposals to allow directors who are subject to serious personal threat to file a "service address" rather than their personal address. The number of directors able to take advantage of this relaxation is likely to be extremely small. All changes (e.g. names, nationality, address, resignation) must also be filed within fourteen days (on Form 288(c)). The Register of Directors must show all the details, and changes, required to be filed with the Registrar.
Register of Other Directorships: Currently the names of all companies of which the director has been a director in the previous five years must also be notified to the Registrar and shown in a register. Since this may be subject to considerable change (not least by passage of time "losing" former directorships) the requirement to update such changes should not be overlooked. However, the Registrar has indicated that there is no necessity to file Form 288(c) on each occasion of a change to this data. The former requirement to state all such directorships on the Annual Return has been dropped although until there is a change in company law, the company's own register must continue to be kept.
Register of Director's Interests: Details of each director's interests in the shares of the company and any subsidiary, fellow subsidiary or holding company must be notified to the company within five days of the person's appointment, and all changes thereafter must be separately notified within five days of their occurrence. This obligation not only relates to shares held personally by the director, but also to shares held by the director's spouse and any minor children (see Companies Act 1985 Section 325). In addition, any share options (and changes including their exercise) issued by the company to a director (or his spouse or infant children) must also be recorded. The only exceptions to this requirement are: if the director holds the shares as a trustee (i.e. there is no personal interest in them); if the director is also a director of the company's holding company which already holds all such details; or if the holding is in a company incorporated overseas.
'REGISTER' OF INTERESTS IN CONTRACTS
Under Section 317 of Companies Act 1985, directors are obliged to notify their company of any interest they may have in contracts (or proposed contracts) being made by the company with a third party.
Interests are defined as either being: GENERAL - that is that the director has an interest in all matters concerning a named third party. Such a statement could be made upon the director's appointment; or SPECIFIC - that a director has an interest in a particular contract. Such a declaration must be made at the first board meeting which considers the proposed contract or on the director becoming aware of the interest and/or of the contract.
There is no requirement for the company to keep a register of such interests, but directors themselves may feel it prudent that such a register should be kept as evidence that they have informed the company, not least since failure to notify an interest is an offence punishable by initial and daily fines.
Check Your Order Status
The first directors and secretary are required to complete Form 10 and send it to the Registrar. Thereafter each director/secretary is required to complete Form 288(a) and arrange for it to be filed with the Registrar within fourteen days of their appointment. As well as signing to indicate their consent to act (to ensure that the director knows of the appointment) full personal details as required (including any former name) must be given. Failure to provide such personal data is an offence subject to an initial plus a daily fine.