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Natural persons
Section 155 introduces a new requirement that a company, private or public, must have at least one director who is a natural person. The purpose is to ensure that every company will have at least one individual who is accountable for the company's actions. Provided there is one such director, any legal person, including a company or a firm, can still be a director.
Any existing company which does not have a director who is a natural person will need to appoint such a director before 1 October 2008. There is, however, a grace period for any company which did not have a director who was a natural person on 8 November 2006. (This is the date on which the 2006 Act received Royal Assent.) The grace period expires on 30 September 2010. The grace period is not available to a company which did not have the statutory minimum number of directors on 8 November 2006. The statutory minimum is two directors for a public company and one for a private company.
The Act does not introduce any requirement for a company secretary to be a natural person.
Under-age directors
Section 157 of the Act introduces a new minimum age of 16 years for a director. Any director who is under the age of 16 on 1 October 2008 will automatically stop being a director on that date. A company should amend its register of directors to reflect this. However, it is not necessary to notify the Registrar of Companies.
Any company affected by this section must make sure that from 1 October 2008 it still has the statutory minimum number of directors. As mentioned above, this is two for a public company and one for a private company.
The prohibition on under-age directors does not protect an individual who is under 16 from liability as a director for criminal or civil liability if they purport to act as a director or shadow director.
Failure to comply
If a company fails to comply with the requirement for at least one director who is a natural person, the Secretary of State may direct the company to make the necessary appointment. The Secretary of State may also make a direction if a company does not have the statutory minimum number of directors. Failure to comply with a direction will result in the company and every officer in default committing an offence.
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