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Who Can Be a Company Director? Requirements, Eligibility & Responsibilities

Glad you asked! The simple answer is almost anyone. However, according to UK laws, you must have 16 years or more and should not have been barred from being a director in the country.  According to these laws, it’s not a must for the directors to live in the UK, but the company must have a UK registered office address.

So whether you’re looking for a company director or want to determine if you’re fit to be a director yourself, this article discusses everything you need to know about who can be a company director.

But first.

Who Is A Company Director?

A company director is an individual who oversees the management of a corporation. Directors make decisions about the organization’s structure and operations. The role is held by a person who is not an employee of the company but acts as an external stakeholder.

The responsibilities of a company director can vary significantly depending on the size and type of organization. While it is true that all directors have certain duties under the Companies Act 2006 of the UK law, these do not include every task needed to run a company successfully.

The main reason is that different types of businesses require different skill sets to succeed. For example, larger corporations may need directors with skills in finance or accounting, while smaller companies may need someone with experience running similar businesses in similar industries. However, both entities will still require directors who can fulfil their legal requirements under UK law without fail.

Directors obtain their power from the Articles of Association of the company through their contract of employment with the company.

Types Of Company Directors

Generally, there are two types of directors in the UK. They include executive directors and non-executive directors.

       i.            Executive Director

The highest-ranking operating officer of a company. Executive directors are involved in the daily management of the company and make some decisions themselves rather than rely on others. They are normally employees of the company and so besides management, they perform other duties as stated in their service contract.

     ii.            Non-executive Director

These perform similar tasks as executive directors but they are more involved in an oversight role than in day-to-day operations. Most shareholders appoint non-executive directors to act as watchdogs for the executive directors’ performance. As such, they do not work full-time. While non-executive directors are not employees of the company they are paid for their tasks under their service of contract.

What Is Required For A Director To Be Appointed By A Company?

The requirements for being a director depend on the country you live in and the company you want to be involved with. In general, anyone over 16 years old who meets certain criteria can become a company director.

For example, in the UK, directors must have a good reputation for integrity, honesty, and sound judgement and have no convictions for fraud or related offences involving dishonesty.

Directors must also not have been disqualified from being or becoming a company official by any court order within the last five years.

You must also be able to demonstrate that you are of good character and have the ability to manage a company.

What Are the Responsibilities of Directors

Directors are the highest-level employees of a company. They are responsible for making sure the company operates according to its articles of incorporation and bylaws. Directors also have fiduciary duties, meaning they must act in the best interest of shareholders.

Other responsibilities of directors include:

1.     Making decisions regarding the management of the company

As a director, you are required to oversee the company’s business activities. You may even be involved in making decisions regarding the company’s management.

For example, if you’re a director at a large multinational corporation with no CEO on staff, you might have to make decisions about hiring and firing employees. You might also approve or veto budgets for projects that your colleagues propose.

2.     Setting goals for the company and overseeing that they are met

Directors are responsible for setting goals for the company and ensuring they are achieved within the right time. The board is responsible for setting the strategy to achieve these goals, but directors should also be involved in negotiating them.

The professionals ensure that a qualified expert with appropriate knowledge and experience reviews all business plans. In general, they do not need to personally conduct independent expertise reviews or prepare their reports on management’s performance. Instead, this would be done by the audit committee or another body established by shareholders through an investor relations agreement (IRA).

3.     Legally running the company ethically while ensuring compliance with all federal, state, and local laws and regulations.

Directors are expected to legally run the company ethically while ensuring compliance with all UK laws and regulations. They are responsible for the financial health of a corporation and must conduct regular audits of its accounts. Directors should also ensure they have access to all relevant information about their company and clear communication lines with other stakeholders, including shareholders, employees, customers, suppliers, etc.

The directors of a company should have experience in business management or finance, but they don’t need to be experts in those fields.

4.     Preparing and maintaining accurate books and records of all financial transactions of the corporation

As a director, you are required to prepare and maintain accurate books and records of all financial transactions of the corporation. These records must be open for inspection by shareholders and creditors of the company, so they should be kept in a safe place.

When Is A Person Not Qualified For Appointment?

If you’re considering becoming a company director, knowing who can and cannot be appointed as a director is important.

The following people are not qualified for an appointment:

  • Bankrupt people (unless they have been discharged from bankruptcy)
  • People who have been convicted of any criminal offence in the UK or elsewhere other than for minor traffic offences or disorderly behaviour.

Are You Looking For Office Space in the UK?

Are you a director at a small business and need a UK registered office address for your company to operate in the UK? Or maybe you want some space to work remotely or a meeting room?

At Clyde Offices, we provide UK registered addresses to ensure you operate your business in the UK legally. We also offer meeting rooms and hot desk facilities to small businesses so can hold your board meetings or even get a place for your staff to catch up on work between projects. Call us today for the best services in Glasgow and the UK at large.  We’re happy to help your business get started with our affordable services.

Final Thoughts

A company director is not a job for the faint of heart. It requires a great deal of dedication, hard work, and patience, but the rewards are well worth it. Being a company director means you can change lives and make dreams come true—not just for yourself but for everyone who works with you.



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