March 2010 FAQs – DIRECTORS
Posted on by Ceri John
My company only has corporate directors, do I now have to change this?
Yes.
The Companies Act 2006 has been fully adopted as of 1 October 2009 with many other changes being brought in beforehand. One of these was that every company must have one director who is a natural person and over the age of 16.
Are directors’ duties that important?
Yes.
In the BIRR Introduction Pack we provide some guidance on the duties a director must consider and his various responsibilities with his role in the company. However the Companies Act 2006 has now put directors’ duties on a statutory footing and it’s strongly recommended that all directors are familiar with these new formal duties. For example, the directors duty to promote the success of a company has gone further than it used too; it now states it must benefit its members and in doing so have regard to its employees, business relationships and its impact on the wider community and the environment.
Is it possible for me now to keep a directors’ home address confidential?
Yes.
This new step means that any director can keep his/her home address confidential and not just those who face risk of violence or intimidation. A service address is now established with any director who may choose to use this option and can be simply be the company’s registered office. Companies House will still require a home address for each director but this information will not be made available to the public.
BIRR Legal Service is currently offering to change a directors’ address for £25 + VAT.
With the new Companies Act and Model Articles specifying new powers for directors our shareholders are worried that they will be able to issue shares without their consent which will result in a dilution of their shareholdings. Is this possible?
The new rules should not generally result in any increased risk of dilution of your shareholding since most articles of association include pre-emption rights to protect shareholders against this.
However it is right that a director of a private company will be able to issue shares without shareholder approval if the company has only one class of shares, unless the articles provide otherwise and subject always to any pre-emption rights.
It is also worth remembering that with the new model articles the authorised share capital concept has been abolished and a director has no limit on the number of new shares he/she will be able to issue.
If you are concerned about the powers of your director contact a member of the BIRR Legal Services Team now and we can help discuss your options.
Can directors really change the name of the company without shareholder approval?
Yes.
A director of a private company will, so long as the board approves, have the power to change the company’s name under the articles of association. In order to restrict this power contact BIRR Legal Services and have us amend your articles of association to remove this power.
Categories: FAQs