Deadline Looms to Get Real People on the Board
The deadline is approaching for every company to have at least one director who is an individual not a corporation.
In the past it was common for subsidiary companies of a group of companies to have just one director and for that director to be a corporation.
Under the Companies Act 2006 this is no longer allowed; every company must have at least one director who is a “natural person” - that is, an individual human being, not a corporate entity.
However transitional provisions gave companies with a sole corporate director a period of grace to appoint an individual as a director.
That period of grace expires on 30th September 2010, and after that date any company that does not have at least one individual ‘natural person’ director, will be liable to a fine of £5,000 plus a daily default fine.
“Clearly any company in this situation must act quickly and take advice as to the formalities required to appoint an additional or replacement director,” said company law expert Patrick McGrath of Vanderpump & Sykes solicitors in Enfield.