Companies House believes there has been a fall from approximately 260,000 companies with sole corporate directors in 2008, to 25,000 at present, indicating that although many have taken appropriate action, clearly others are yet to act. Those with complicated group structures or large estates with trust companies may be at particular risk of failure to comply by oversight.
The legislation applies equally to dormant companies and, as a matter of good housekeeping, it is worth checking compliance with this new rule, given that natural directors step down for many reasons. Should a company be left with a sole corporate director, it would be in breach.
What you must do to comply
Any company which finds itself in the position of having only a corporate director, needs to act now to appoint a natural person either to replace or stand alongside an existing corporate director. The process itself is straight forward and will involve a board resolution and the filing of form AP01 at Companies House, setting out the new director’s details.
The consequences of missing the deadline could be significant. After 30 September 2010, any company without a natural person as a director will be in default and subject to fines. Similarly any company with a natural person acting as a company secretary with only a corporate director will also be in default.
How we can help
Our team can guide you through this process to make it as simple as possible. For more information on any of the issues mentioned here please contact a member of the team, or click here for further information on the Companies Act 2006.