How to Appoint a New Director
There are numerous fancy designations in most companies. But what sets a director apart is the fact that you need to have at least one director (alongside one shareholder) to be recognized as a company. There is no limit on the number of directors; they could be added/replaced as long as the members approve them. In fact, while starting a company, there could be a sing director who might also be the single shareholder of the company.
What is the process of appointing a new director?
The step before initiating the process is perhaps the most important one: choosing the right candidate and ensuring he/she fulfills all the norms. Once the process initiates, the first step is to notify the Companies House (since it needs to have an updated info about the companies). This requires a special form called AP01 and can be sent via postal mail or web (through the WebFiling system). However, it may be the case that you are not very confident about filling the forms yourself and fear to commit mistakes. In such cases, it is better to contact a company formation service who could fill the form for you.
What are the restrictions?
While choosing a director is a company’s own discretion, some guidelines have to be followed. These are:
- Person must be at least 16 years old.
- Person must not be disqualified as a director from previous company.
- Person should not be an undercharged bankrupt, or someone who is facing a bankruptcy case under court.
- Person must not be an auditor or anyone not included in the Articles of Association.
- Holding shares is neither a restriction nor an obligation for the director of a company.
The required information you need to know
When submitting the update regarding appointment of new directors to Companies House, following information has to be provided:
- Appointment Date
- Full names, along with any names used in the past
- Date of Birth
- Nationality
- Occupation
- Office Address
- Residence Address
Middle name is often required to be included in the full name. Personal details can be very well changed later on, but it is recommended to get it right at once.
Occupation
Occupation is not a mandatory field, and can be left blank if the person does not currently have any occupation. Alternatively, the field can be simply filled as being “Company Director”. However, legitimately filling the field may have future business advantages.
Address
A person may choose to refrain from making his residence address public by choosing a service address as the sole means of contact. Even directors who run the company from home can choose a service address using director’s service address. Also, a ‘consent to act’ has to be confirmed by the director that declares that he is willing to act upon postal mails sent to his address.
However, there is no restriction that the address has to be within the UK.
Removing a director
The Companies House norms mandate that the director field must be empty in any case. If more than one director exists, you can easily remove him/her. However, in cases where the director in question is the only director, a new director has to be added first before removing the previous one. Also, in case of a single director, he must be a person, not a corporate entity.
Conclusion
Adding new directors to the company is a tactical choice and can be beneficial to the company in both short and long term. As such, it is fortunate that the process of adding/removing directors is a relatively simple process.