ELLIOT GREEN LICENSED INSOLVENCY PRACTITIONER

It is a widespread belief, that if you are not listed and registered as a Director at Companies House, that you are not a Director of a UK company.

This is simply wrong. In UK law there are essentially three types of director:

1.    Registered Director

2.    Shadow Director

3.    De facto Director

In the Companies Acts “shadow director”, in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act.

A de facto director is someone who holds themselves out as a director without being registered and who undertakes duties that should be undertaken by a person who is a director.

With any type of director, the question often is about whether or not you have a degree of control over a company’s affairs.

The relevance this has is that if a director (registered or not) causes a company to suffer loss, he or she could be liable for the losses suffered. It will be by no means a defence to a claim, that simply because they were not registered as a director they cannot be liable for actions causing loss to a company.

If in any doubt it is best to take advice to enable the position be clarified so that any surprises later on, are rather more welcome than unwelcome!

This entry was posted on Wednesday, March 17th, 2010 at 2:43 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.