4 Limits On Who Can Be A Company Director
If you’re thinking about starting a company, there are several things you need to consider, such as the address of your registered office and whether you can use the company name you’ve had your heart set on.
But you also need to think about who your company directors will be.
A common misconception is that anyone can become a company director. While this is mostly true, there are some limitations you need to be aware of.
Limit 1 - At least one director must be a natural person
All companies need to have at least one director, and while having at least one director seems simple at first, you need to consider that this person has to be a natural person.
A natural person is another way of saying that the sole director of a company cannot be another company. They have to be an actual human who can be held accountable for the company.
Limit 2 - Director age
Anyone over the age of 16 can be a company director in the UK; however, it’s not always practical to have someone so young.
Often, it is best practice to have directors who are at least 18, as anyone under this age cannot enter into contracts or sign contracts on behalf of a company.
Limit 3 - Ongoing bankruptcy
Company directors need to be able to keep the company financially viable. Because of this, company directors cannot be “undischarged bankrupt” - or, in other words, have active bankruptcy proceedings against them.
There is an exemption to this which can be applied for in the courts; however, it is rarely granted.
Limit 4 - Prior disqualification
If a company director has been found breaking the rules, they can be disqualified by the courts.
Disqualification can be for fraud, persistent breaching of company law or failure to keep proper records.
When a company director is disqualified, they cannot be listed as a company director for the term of their disqualification, typically 2-15 years.
A common misconception
There is a common misconception that directors of UK companies have to be UK nationals. However, this isn’t true. Directors can be nationals of any country with their correspondence address (where Companies House can contact them) situated anywhere in the world.
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