Appointment of Director and Secretary: Companies Act 2006

The Companies Act 2006 requires a private company to have at least one director. A company’s articles of association may impose a higher minimum requirement for the number of directors. At least one director must be an individual. A private company does not need to have a secretary unless the company’s articles of association require it.

A public company must have at least two directors and a secretary. At least one director must be an individual. The secretary of a public company must be qualified.

It is up to the members to appoint the people they believe will run the company well on their behalf. The only restrictions that prevent anyone becoming a director are:

• They must not have been disqualified from acting as a company director (unless the court has given them permission to act for a particular company);
• They must not be an un-discharged bankrupt (unless they have been given permission by the court to act for a particular company);
• They must not be under the age of 16;

In addition, at least one director must be an individual. Companies who only had corporate directors on or before 6 November 2006 have until 1 October 2010 to appoint such a director.

Directors must prepare and file documents required under the Companies Act 2006, including the annual accounts and annual returns. Failure to file these documents could result in directors being prosecuted and fined up to £5,000 for each offence and the company could also be struck off the register. In addition, the company will be liable to a civil penalty if its accounts are delivered late.

A public company must meet the following requirements:

• It must have at least two directors (who may also be members of the company);
• It must have at least one director who is an individual;
• All individual directors must be aged 16 or over;
• It must have at least one secretary;

The requirement of the public company is that the secretary must be qualified in one or more of the following ways:

• He has held the office of secretary of a public company for at least three of the five years before their appointment; or
• He is a barrister, advocate or solicitor called or admitted in any part of the United Kingdom; or
• He is a person who, by virtue of his or her previous experience or membership of another body, appears to the directors to be capable of discharging the functions of secretary; or
• He is a member of any of the following bodies:

• The Institute of Chartered Accountants in England and Wales;
• The Institute of Chartered Accountants of Scotland;
• The Institute of Chartered Accountants in Ireland;
• The Institute of Chartered Secretaries and Administrators;
• The Association of Chartered Certified Accountants;
• The Chartered Institute of Management Accountants; or
• The Chartered Institute of Public Finance and Accountancy.

Related documents: directors service contract | service contracts

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