...is important that all aspects are thoroughly understood and the correct procedures followed.

Who is director?

(NB. The masculine form is used throughout to refer to both men and women.)

All directors, including non-executive directors, should be properly appointed in accordance with the provisions of the Companies Act 1985 as amended and company articles. However, the Companies Act defines a director as any person occupying the position of director, by whatever name called. It also defines a shadow director as a person in accordance with whose instructions the directors are accustomed to act. It follows that a person may be a director, and take on the obligations of directorship, without having been properly appointed.

Nearly all directors are flesh and blood human beings but this is not a requirement. A company may be a director of another company.

The law and the rules

The appointment and removal of directors is controlled by the Companies Act 1985 and by company articles. In some respects the Companies Act cannot be varied by company articles, but in other respects it is indicative only and its provisions may be amended or overridden by the articles.

Every company is required to adopt articles of association and these influence, among other things, the appointment and removal of directors. Table A (for a company limited by shares) and Table C (for a company limited by guarantee and having no share capital) are model sets of articles issued in conjunction with the Companies Act.

A company has a great deal of freedom concerning the content of its articles and they may be very relevant to the appointment and removal of directors. However, to the extent that it has not been excluded, Table A (or Table C)...

NOTE: All illustrations and photos have been removed from this article.




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