158 Power to provide for exceptions from minimum age requirement
(1) The Secretary of State may make provision by regulations for cases in which a person who has not attained the age of 16 years may be appointed a director of a company.
(2) The regulations must specify the circumstances in which, and any conditions subject to which, the appointment may be made.
(3) If the specified circumstances cease to obtain, or any specified conditions cease to be met, a person who was appointed by virtue of the regulations and who has not since attained the age of 16 years ceases to hold office by virtue of that appointment.
(3A) Nothing in subsection (3) affects any liability of a person under any provision of the Companies Acts or any other enactment, if, having ceased to hold office by virtue of that subsection, the person—
(a) purports to act as director, or
(b) acts as shadow director.
(4) The regulations may make different provision for different parts of the United Kingdom.
This is without prejudice to the general power to make different provision for different cases.
(5) Regulations under this section are subject to negative resolution procedure.
159A Disqualified person not to be appointed as director
(1) A person may not be appointed a director of a company if the person is disqualified under the directors disqualification legislation (see subsection (2)).
(2) In the table—
(a) Part 1 defines “disqualified under the directors disqualification legislation” for the purposes of provisions of this Act so far as relating to—
(i) a company registered in England and Wales or Scotland, or
(ii) the delivery of a document to the registrar of companies for England and Wales or Scotland or a statement contained in such a document;
(b) Part 2 defines “disqualified under the directors disqualification legislation” for the purposes of provisions of this Act so far as relating to—
(i) a company registered in Northern Ireland, or
(ii) the delivery of a document to the registrar of companies for Northern Ireland or a statement contained in such a document.
For those purposes a person (P) is disqualified under the directors disqualification legislation if: | Except in the application of the provision in relation to P acting in a capacity, or doing anything, for which P has the permission of a court or the authority of a licence, or in respect of which an exception applies, by virtue of:
Part 1: England and Wales and Scotland
P is subject to a disqualification order or undertaking under the Company Directors Disqualification Act 1986. | Section 1(1), 1A(1) or 9B(4) of the 1986 Act.
Any of the circumstances mentioned in section 11 of the Company Directors Disqualification Act 1986 (bankruptcy etc) apply to P. | Section 11 of the 1986 Act.
P is subject to director disqualification sanctions within the meaning of section 11A of the Company Directors Disqualification Act 1986. | Section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018 (exceptions and licences).
Section 12 of the Company Directors Disqualification Act 1986 (disabilities on revocation of administration order against an individual) applies to P. | Section 12 of the 1986 Act.
P is subject to a disqualification order or undertaking mentioned in section 12A or 12B of the Company Directors Disqualification Act 1986 (recognition of Northern Ireland disqualification orders and undertakings). | Section 12A or 12B of the 1986 Act.
P is disqualified as mentioned in section 1184(2)(a) or (b) or is subject to a disqualification undertaking under section 1184(3). | Section 1184(5).
Part 2: Northern Ireland
P is subject to a disqualification order or undertaking under the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I.2002/3150 (N.I. 4)). | Article 3(1), 4(1) or 13B(4) of the 2002 Order.
Any of the circumstances mentioned in Article 15 of the Company Directors Disqualification (Northern Ireland) Order 2002 (bankruptcy etc) apply to P. | Article 15 of the 2002 Order.
P is subject to director disqualification sanctions within the meaning of Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002. | Section 15(3A) of the Sanctions and Anti-Money Laundering Act 2018 (exceptions and licences).
Article 16 of the Company Directors Disqualification (Northern Ireland) Order 2002 (disabilities on revocation of administration order against an individual) applies to P. | Article 16 of the 2002 Order.
P is subject to a disqualification order or undertaking mentioned in Article 17 of the Company Directors Disqualification (Northern Ireland) Order 2002 (recognition of GB disqualification orders and undertakings). | Article 17 of the 2002 Order.
P is disqualified as mentioned in section 1184(2)(a) or (b) or is subject to a disqualification undertaking under section 1184(3). | Section 1184(5).
(3) An appointment made in contravention of this section is void.
(4) Nothing in this section affects any liability of a person under any provision of the Companies Acts or any other enactment if the person—
(a) purports to act as director, or
(b) acts as shadow director,
although the person could not, by virtue of this section, be validly appointed as a director.
160 Appointment of directors of public company to be voted on individually
(1) At a general meeting of a public company a motion for the appointment of two or more persons as directors of the company by a single resolution must not be made unless a resolution that it should be so made has first been agreed to by the meeting without any vote being given against it.
(2) A resolution moved in contravention of this section is void, whether or not its being so moved was objected to at the time.
But where a resolution so moved is passed, no provision for the automatic reappointment of retiring directors in default of another appointment applies.
(3) For the purposes of this section a motion for approving a person's appointment, or for nominating a person for appointment, is treated as a motion for his appointment.
(4) Nothing in this section applies to a resolution amending the company's articles.
(1) The acts of a person acting as a director are valid notwithstanding that it is afterwards discovered—
(a) that there was a defect in his appointment;
(b) that he was disqualified from holding office;
(c) that he had ceased to hold office;
(d) that he was not entitled to vote on the matter in question.
(2) This applies even if the resolution for his appointment is void under section 160 (appointment of directors of public company to be voted on individually).
167G Duty to notify registrar of change in directors
(1) A company must give notice to the registrar if a person—
(a) becomes a director of the company, or
(b) ceases to be a director of the company.
(2) The notice must specify the date on which the person became or ceased to be a director of the company.
(3) A notice under subsection (1)(a) of a person having become a director must contain—
(a) a statement of the required information about the new director (see sections 167J and 167K);
(b) a statement by the company that the person has consented to act in that capacity;
(c) if the person is an individual, a statement that their identity is verified (see section 1110A);
(d) a statement that the person is not—
(i) disqualified under the directors disqualification legislation (see section 159A(2)), or
(ii) otherwise ineligible by virtue of any enactment for appointment as a director;
(e) if the person would be disqualified under the directors disqualification legislation but for the permission of a court to act, a statement to that effect specifying—
(i) the court by which permission was given, and
(ii) the date on which permission was given.
(f) if the person would be disqualified under the directors disqualification legislation by virtue of section 11A of the Company Directors Disqualification Act 1986 or Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002 (designated persons under sanctions legislation) but for the authority of a licence of the kind mentioned in that section or Article, a statement to that effect specifying—
(i) the date on which the licence was issued, and
(ii) by whom it was issued.
(4) In subsection (3)(e) “permission of a court to act” means permission of a court under a provision mentioned in column 2 of the table in section 159A(2).
(5) Subsection (1)(a) does not require a company, on its incorporation, to give notice in relation to a person named as a proposed director in the statement under section 12.
(6) A notice under this section must be given within the period of 14 days beginning with the day on which the person becomes or ceases to be a director.
167H Duty to notify registrar of changes of information
(1) A company must give notice to the registrar of any change in the required information about a director (see sections 167J and 167K).
(2) The notice must specify the date on which the change occurred.
(3) A notice under this section must be given within the period of 14 days beginning with the day on which the change occurs.
(4) Where a company gives notice of a change of a director’s service address but not their residential address, the notice must contain a statement that the residential address is unchanged.
167I Notification of changes occurring before company’s incorporation
(1) A company must give notice to the registrar if a person named in the statement under section 12 as a proposed director of the company did not become a director on its incorporation.
(2) A company must give notice to the registrar of any change in the required information about a proposed director that occurred—
(a) after the application for the company’s registration under section 9 was delivered to the registrar, but
(b) before the company was incorporated.
(3) But a company is not required to give notice under subsection (2) in respect of a person if it gives notice under subsection (1) in respect of the person.
(4) A notice under subsection (2) must specify the date on which the change occurred.
(5) A notice under this section must be given within the period of 14 days beginning with the day on which the company was incorporated.
167J Required information about a director: individuals
(1) The required information about a director (or proposed director) who is an individual is—
(a) name, date of birth and nationality;
(b) any relevant former names;
(c) a service address (which may be stated as “The company’s registered office”);
(d) usual residential address;
(e) the part of the United Kingdom in which the individual is usually resident or, if the individual is usually resident in a country or state outside the United Kingdom, that country or state.
(2) In subsection (1)(b) “relevant former name” means any former name other than—
(a) in the case of a peer, or an individual normally known by a British title, the name by which the individual was known previous to the adoption of or succession to the title, or
(b) in the case of any person—
(i) a former name which was changed or disused before the person attained the age of 16 years,
(ii) a former name which has been changed or disused for 20 years or more, or
(iii) a former name which the registrar is required to refrain from making available for public inspection or from disclosing (or both) by virtue of regulations under section 1088(1)(a) or (b).
(3) In this section—
“former name” means a name by which the individual was formerly known for business purposes;
“name” means the individual’s forename and surname.
(4) Where a director (or proposed director) is a peer or an individual usually known by a title, any requirement imposed by this Act to provide the individual’s name because it forms part of the required information may be satisfied by providing that title instead of the individual’s forename and surname.
(5) The Secretary of State may by regulations—
(a) amend this section so as to change the required information about a director (or proposed director) who is an individual;
(b) repeal subsection (4).
(6) Regulations under this section are subject to affirmative resolution procedure.
167K Required information about a director: corporate directors and firms
(1) The required information about a director (or proposed director) that is a body corporate, or a firm that is a legal person under the law by which it is governed, is—
(a) corporate or firm name;
(b) principal office;
(c) a service address (which may be stated as “The company’s registered office”);
(d) in the case of a limited company that is a UK-registered company, the registered number;
(e) in any other case, particulars of—
(i) the legal form of the body corporate or firm and the law by which it is governed, and
(ii) if applicable, the register in which it is entered (including details of the state) and its registration number in that register.
(2) The Secretary of State may by regulations amend this section so as to change the required information about a director (or proposed director) of a description mentioned in subsection (1).
(3) Regulations under this section are subject to affirmative resolution procedure.
167L Directors: offence of failure to notify of changes
(1) If a company fails, without reasonable excuse, to comply with section 167G, 167H or 167I, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(2) For this purpose a shadow director is treated as an officer of the company.
(3) A person guilty of an offence under this section is liable on summary conviction—
(a) in England and Wales, to a fine;
(b) in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
167M Prohibition on director acting unless ID verified
(1) An individual must not act as a director of a company unless the individual’s identity is verified (see section 1110A).
(2) A company must ensure that an individual does not act as a director unless the individual’s identity is verified (see section 1110A).
(3) A person who contravenes subsection (1) commits an offence.
(4) If a company contravenes subsection (2) an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
For this purpose a shadow director is treated as an officer of the company.
(5) A person guilty of an offence under this section is liable on summary conviction—
(a) in England and Wales, to a fine;
(b) in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
(6) The only consequences of contravening subsections (1) and (2) are the offences provided for by this section (so that, for example, a contravention does not in any way affect the validity of an individual’s acts as a director).
167N Prohibition on acting unless directorship notified
(1) This section applies where—
(a) a person has become a director of a company otherwise than on its incorporation, and
(b) notice under section 167G of the person having done so has not been given within the period mentioned in subsection (6) of that section.
(2) The person may not act as a director of the company until notice is given under section 167G.
(3) A person who contravenes subsection (2) commits an offence.
(4) Where the offence is committed by a firm, every officer of the firm who is in default also commits the offence.
(5) It is a defence for a person charged with an offence under this section to prove that they reasonably believed that notice had been given under section 167G.
(6) A person guilty of an offence under this section is liable on summary conviction—
(a) in England and Wales, to a fine;
(b) in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
(7) The only consequence of a contravention of subsection (2) is the offence provided for by this section (so that, for example, a contravention does not in any way affect the validity of a person’s acts as a director).
(1) A company may by ordinary resolution at a meeting remove a director before the expiration of his period of office, notwithstanding anything in any agreement between it and him.
(2) Special notice is required of a resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed.
(3) A vacancy created by the removal of a director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy.
(4) A person appointed director in place of a person removed under this section is treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director.
(5) This section is not to be taken—
(a) as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director, or
(b) as derogating from any power to remove a director that may exist apart from this section.
(1) On receipt of notice of an intended resolution to remove a director under section 168, the company must forthwith send a copy of the notice to the director concerned.
(2) The director (whether or not a member of the company) is entitled to be heard on the resolution at the meeting.
(3) Where notice is given of an intended resolution to remove a director under that section, and the director concerned makes with respect to it representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so—
(a) in any notice of the resolution given to members of the company state the fact of the representations having been made; and
(b) send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company).
(4) If a copy of the representations is not sent as required by subsection (3) because received too late or because of the company's default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.
(5) Copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused.
(6) The court may order the company's costs (in Scotland, expenses) on an application under subsection (5) to be paid in whole or in part by the director, notwithstanding that he is not a party to the application.
169A Removal from office of disqualified directors
(1) A person who has been appointed as a director of a company ceases to hold office by virtue of that appointment if the person becomes disqualified under the directors disqualification legislation (see section 159A(2)).
(2) Nothing in this section affects any liability of a person under any provision of the Companies Acts or any other enactment, if, having ceased to hold office by virtue of subsection (1), the person—
(a) purports to act as director, or
(b) acts as shadow director.
(3) In relation to a person appointed as a director of a company before the time when this section comes into force, the reference in subsection (1) to a person who becomes disqualified includes a reference to a person who, at that time, is already disqualified.
(1) The general duties specified in sections 171 to 177 are owed by a director of a company to the company.
(2) A person who ceases to be a director continues to be subject—
(a) to the duty in section 175 (duty to avoid conflicts of interest) as regards the exploitation of any property, information or opportunity of which he became aware at a time when he was a director, and
(b) to the duty in section 176 (duty not to accept benefits from third parties) as regards things done or omitted by him before he ceased to be a director.
To that extent those duties apply to a former director as to a director, subject to any necessary adaptations.
(3) The general duties are based on certain common law rules and equitable principles as they apply in relation to directors and have effect in place of those rules and principles as regards the duties owed to a company by a director.
(4) The general duties shall be interpreted and applied in the same way as common law rules or equitable principles, and regard shall be had to the corresponding common law rules and equitable principles in interpreting and applying the general duties.
(5) The general duties apply to a shadow director of a company where and to the extent that they are capable of so applying.
A director of a company must—
(a) act in accordance with the company's constitution, and
(b) only exercise powers for the purposes for which they are conferred.
(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a) the likely consequences of any decision in the long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with suppliers, customers and others,
(d) the impact of the company's operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
(2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company.
(1) A director of a company must exercise independent judgment.
(2) This duty is not infringed by his acting—
(a) in accordance with an agreement duly entered into by the company that restricts the future exercise of discretion by its directors, or
(b) in a way authorised by the company's constitution.
174 Duty to exercise reasonable care, skill and diligence
(1) A director of a company must exercise reasonable care, skill and diligence.
(2) This means the care, skill and diligence that would be exercised by a reasonably diligent person with—
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company, and
(b) the general knowledge, skill and experience that the director has.
(1) A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
(2) This applies in particular to the exploitation of any property, information or opportunity (and it is immaterial whether the company could take advantage of the property, information or opportunity).
(3) This duty does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company.
(4) This duty is not infringed—
(a) if the situation cannot reasonably be regarded as likely to give rise to a conflict of interest; or
(b) if the matter has been authorised by the directors.
(5) Authorisation may be given by the directors—
(a) where the company is a private company and nothing in the company's constitution invalidates such authorisation, by the matter being proposed to and authorised by the directors; or
(b) where the company is a public company and its constitution includes provision enabling the directors to authorise the matter, by the matter being proposed to and authorised by them in accordance with the constitution.
(6) The authorisation is effective only if—
(a) any requirement as to the quorum at the meeting at which the matter is considered is met without counting the director in question or any other interested director, and
(b) the matter was agreed to without their voting or would have been agreed to if their votes had not been counted.
(7) Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.
176 Duty not to accept benefits from third parties
(1) A director of a company must not accept a benefit from a third party conferred by reason of—
(a) his being a director, or
(b) his doing (or not doing) anything as director.
(2) A “third party” means a person other than the company, an associated body corporate or a person acting on behalf of the company or an associated body corporate.
(3) Benefits received by a director from a person by whom his services (as a director or otherwise) are provided to the company are not regarded as conferred by a third party.
(4) This duty is not infringed if the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.
(5) Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.
177 Duty to declare interest in proposed transaction or arrangement
(1) If a director of a company is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the company, he must declare the nature and extent of that interest to the other directors.
(2) The declaration may (but need not) be made—
(a) at a meeting of the directors, or
(b) by notice to the directors in accordance with—
(i) section 184 (notice in writing), or
(ii) section 185 (general notice).
(3) If a declaration of interest under this section proves to be, or becomes, inaccurate or incomplete, a further declaration must be made.
(4) Any declaration required by this section must be made before the company enters into the transaction or arrangement.
(5) This section does not require a declaration of an interest of which the director is not aware or where the director is not aware of the transaction or arrangement in question.
For this purpose a director is treated as being aware of matters of which he ought reasonably to be aware.
(6) A director need not declare an interest—
(a) if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
(b) if, or to the extent that, the other directors are already aware of it (and for this purpose the other directors are treated as aware of anything of which they ought reasonably to be aware); or
(c) if, or to the extent that, it concerns terms of his service contract that have been or are to be considered—
(i) by a meeting of the directors, or
(ii) by a committee of the directors appointed for the purpose under the company's constitution.
178 Civil consequences of breach of general duties
(1) The consequences of breach (or threatened breach) of sections 171 to 177 are the same as would apply if the corresponding common law rule or equitable principle applied.
(2) The duties in those sections (with the exception of section 174 (duty to exercise reasonable care, skill and diligence)) are, accordingly, enforceable in the same way as any other fiduciary duty owed to a company by its directors.
(1) In a case where—
(a) section 175 (duty to avoid conflicts of interest) is complied with by authorisation by the directors, or
(b) section 177 (duty to declare interest in proposed transaction or arrangement) is complied with,
the transaction or arrangement is not liable to be set aside by virtue of any common law rule or equitable principle requiring the consent or approval of the members of the company.
This is without prejudice to any enactment, or provision of the company's constitution, requiring such consent or approval.
(2) The application of the general duties is not affected by the fact that the case also falls within Chapter 4 (transactions requiring approval of members)or 4A, except that where either of those Chapters applies and—
(a) approval is given under the Chapter concerned, or
(b) the matter is one as to which it is provided that approval is not needed,
it is not necessary also to comply with section 175 (duty to avoid conflicts of interest) or section 176 (duty not to accept benefits from third parties).
(3) Compliance with the general duties does not remove the need for approval under any applicable provision of Chapter 4 (transactions requiring approval of members)or 4A.
(4) The general duties—
(a) have effect subject to any rule of law enabling the company to give authority, specifically or generally, for anything to be done (or omitted) by the directors, or any of them, that would otherwise be a breach of duty, and
(b) where the company's articles contain provisions for dealing with conflicts of interest, are not infringed by anything done (or omitted) by the directors, or any of them, in accordance with those provisions.
(5) Otherwise, the general duties have effect (except as otherwise provided or the context otherwise requires) notwithstanding any enactment or rule of law.