UK companies legally bound to appoint human company director

UK authorities are implementing the second phase of the UK Companies Act 2006 making it mandatory for all companies to appoint at least one person as a director by tomorrow.

Failure to appoint a natural person to the company’s board before tomorrow could result in fines of up to £5,000.

The appointment, once made, should be notified to Companies House and amended on the Register of Directors.

Many businesses have to date mitigated the risks of potential personal liability for directors using a “corporate director”, usually a limited liability company. The individual directors are then appointed directors of the corporate director.

“Authorities now want to ensure that there is some individual present who can be held accountable for every UK registered company should the need arise,” said Shan Nair, co-founder and chief executive of Nair & Co.

“Companies without an eligible director may not be considered in good standing and this may also affect their ability to file accounts with Companies House as an eligible director’s approval is required.”

Nair & Co. is a provider of integrated solutions in the HR, finance, tax, compliance and legal arenas making a company’s overseas operations less risky and more strategic. It currently has more than 740 client operations in over 50 countries with offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals.

The UK Companies Act 2006 provisions were made effective from October 1, 2008. However, a two-year grace period was granted for companies which did not have at least one director who was a natural person at the time when the 2006 Act received Royal Assent in November 08, 2006.

Companies registered after November 08, 2006 needed to appoint a natural director by October 01, 2008.