Are there any limitations on who can be a director of a company?

Specific limitations are also likely to be found in a company’s articles of association. However, as these rules are created by the members (shareholders) themselves, any restrictions regarding the appointment of a director can be overruled by a special resolution. A company solicitor can provide legal advice on how to alter the articles of association.

In contrast to the articles which can be overruled, the Companies Act 2006 provides clear guidelines on what the requirements are for a director. For example, section 157 of the Act states that a director must be at least 16 years of age. Even if a company has articles which specifically allow for the appointment of a 14 year old to the position of director, the articles are not enforceable in law, as they contradict the Act. It should be noted here that a person who is under the required age may still be appointed as long as the appointment does not take effect until he or she has reached the relevant age.

Another important limitation on the eligibility of individuals as directors is an individual’s past behaviour. Specifically, an individual who has been convicted of certain offences may not be permitted to become a director. A company solicitor can advise on which offences will prevent a person from being appointed a director of a company.

Apart from the restrictions mentioned above there are only a few restrictions which relate to a director’s potential conflict of interest. There are no restrictions with regards to professional experience, business acumen, or even legal knowledge. Any person who is not prevented from being a director for personal reasons can become a director.

Many commercial solicitors are directors of companies which are not trading. These companies (also known as shelf companies) are paper companies created by commercial services providers or commercial solicitors who are then able to transfer ownership of the paper companies to their clients. However, whilst in waiting a company is still required to have directors, and therefore a commercial solicitor could be a director of hundreds of non-trading companies.

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