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E-Quick Package |
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 £ 32.00 | No Annual Charges | | |
 This is our most popular package with UK residents, and includes:
 The registration of your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1,000, this is divided into 1,000 ordinary shares valued at £1.00 each (it is not required to have all of the shares issued, but a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register.
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Economy Package |
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| £ 82.00 | Annual Maintenance Fee £50.00 | | |
This is our most popular package with EU residents, and includes: The registration your company from scratch using one of our registered office addresses, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1,000, this is divided into 1,000 ordinary shares valued at £1.00 each (it is not required to have all of the shares issued, but a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
 The provision of a registered office address for 12 months is also included in the price of this package (our registered office address service is charged annually);
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register.
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Premier Package |
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| £ 131.95 | Annual Maintenance Fee £99.95 | | |
This is another one very popular package for small and medium size businesses, such as those being run by a sole director from home, and for companies owned by overseas residents who still need a local registered office address but would rather not open local offices; This package is often chosen by such customers, who are looking to minimise a sole director personal liability (and who are not quite familiar with the new UK corporate legislation), because this package includes a provision of a nominee secretary for 12 months. This package is also includes: The registration your company from scratch using one of our registered office addresses, and appoint your own candidates to the roles of director, and shareholder;
The standard capital on formation is £1,000, this is divided into 1,000 ordinary shares valued at £1.00 each (it is not required to have all of the shares issued, but a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is included in the price of this package (our registered office address service is charged annually);
The provision of a nominee secretary for 12 months is also included in the price of this package (our nominee secretary service is charged annually); The following hard bound copy of corporate documents, will be posted to you upon formation of your company: A laminated copy of the certificate of incorporation of your company;
A hard bound copy of the memorandum and articles of association;
A hard bound copy of the minutes of the first meeting of directors;
Share certificates, and your company register.
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Deluxe Package |
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| £ 256.95 | Annual Maintenance Fee £379.95 | | |
The Deluxe business start-up package is our most popular package with international customers, and includes: Incorporation of your company from scratch using one of our registered office addresses, our nominee director and nominee secretary, we will appoint your own candidate(s) to the role of shareholder;
The standard capital on formation is £1,000, this is divided into 1,000 ordinary shares valued at £1.00 each (it is not required to have all of the shares issued, but a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is included in the price of this package (our registered office address service is charged annually);
The provision of a nominee secretary for 12 months is included in the price of this package (our nominee secretary service is charged annually);
The provision of a nominee director for 12 months is also included in the price of this package (our nominee director service is charged annually); The following two hard bound copies of corporate documents, will be posted to you upon formation of your company: A laminated copy of the certificate of incorporation of your company;
A hard bound copy of the memorandum and articles of association;
A hard bound copy of the minutes of the first meeting of directors;
Share certificates, and your company register;
The general power of attorney signed by a nominee director;
Pre-signed, undated resignation letter from a nominee director;
The agreement for the provision of nominee service and indemnification of nominee.
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| Business Start-Up: Legal Requirements | | |
A private company limited by shares in England and Wales must have at least one director, one shareholder, and may have a secretary.
You need at least one person to form this type of company. If there is only one director, and that director is a natural person in your company, that director can also act as the secretary.
A company must have at least one director who is a natural person. This requirement is met if the office of director is held by a natural person as a corporation sole or otherwise by virtue of an office.
You can register a sole director' company, if you are familiar with the secretaries duties and responsibilities, because all of them belongs to a sole director.
The directors and secretary of your company can also be shareholders.
The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director.
Under the Companies Act 2006, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts).
There is no requirement for the officers of your company to be UK citizens or residents, nor for them to hold valid work permits.
Owning, or being an officer of a UK company does not, however, grant you any right to live or work in the UK if you are a foreign national.
Your company must have a registered office address within England or Wales; this is the official address of your company and will be on the public record as such.
Your company must hold its official company documents at its registered office address: its register of shareholders, and its constitutional documents.
So long as you maintain a registered office address in England or Wales, you can conduct your business from any place in the world: you do not have to run your business from your registered office address.
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Company Formation Home Page >> Conducting Business in the United Kingdom >> Company' Registered Office, Director and SecretaryESTABLISH LIMITED COMPANY IN ENGLAND, COMPANY FORMATION SERVICE - REGISTERED OFFICE FACILITY The legislation surrounding companies often appears complicated and may at times be confusing for those involved. The company secretary plays an important role in ensuring that a company and its directors both comply with company law. The role might be described best as that of chief administrator! A company secretary is appointed when a company is first incorporated. Any subsequent changes to the particulars of the company directors or secretary, for example, changes in their name or address, must be notified to Companies House using a standard form - 288c. When a director or company secretary resigns, form 288b must be completed and sent to Companies House. When a new director or secretary is appointed, form 288a should be used. A company secretary will have regular dealings with Companies House, as this is where public records about the company are held. (Forms 288a (to appoint the directors and secretary), Form 288b, Form 288c, or Form 287).
Company legislation requires that a minimum amount of information about a company must be publicly available, including, for example, annual accounts, the registered office address and details of directors, the secretary and members. The company secretary is an officer of the company. This means that they may be criminally liable for defaults committed by the company, for example, failure to file in the time allowed, any change in the details of the company's directors and secretary and the company's annual return.
Core Duties of the Company Secretary. The core duties of the company secretary of a UK company limited by shares are as follows: Board Meetings. Co-ordinating the operation of the company’s formal decision making and reporting machinery; formulating meeting agendas with the chairman and /or the chief executive; attending and minuting of the meetings; maintaining minute books; certifying copies of minutes; and ensuring that correct procedures are followed. General Meetings: - Originating and obtaining internal and external agreement to all documentation for circulation to shareholders; co-ordinating the administration and minuting of meetings; and ensuring that correct procedures are followed. Company Constitution: - Ensuring that the company complies with its constitution; drafting and incorporating amendments in accordance with correct procedures. General Compliance: - Monitoring and ensuring compliance with relevant legal requirements, particularly under the Companies Act.
The directors and secretary (or officers) manage the company. The shareholders (or members) own the company. In many private companies the director and secretary are the shareholders of the company. A private company can have a sole director but he cannot also be the secretary. Where there is more than one director, one of the directors may act as secretary. There is no restriction on the number of directorships an individual may hold. There is no restriction on the nationality or residency of directors or secretaries. Corporate directors and secretaries are allowed.
The Registered Office Address need not be the company's place of business, and is often the address of a company that provides company formation services such as Coddan CPM Limited or that of a solicitor or accountant or even one of the directors home address. Official documents, such as documents from a court, are normally served on a company at its Registered Office, and official correspondence is usually sent to the Registered Office, for example official letters from the Inland Revenue and the Registrar of Companies. The address must be in England or Wales for companies registered in England or Wales, and Scotland for companies registered in Scotland. If you do not have a suitable address, or if you would prefer not to use your own address, we can provide you with a Registered Office. If you want to become familiar with the description and the contents of companies registration packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that UK limited company incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the company incorporation within United Kingdom, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.
Live Help » Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors. Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable. If you have any questions about the company establishment then please E-Mail or call us: Call FREE 0800 081 1510, Overseas Residents: +44 845 020 4269 or +44 20 7748 3039, Fax: +44 20 7681 3318.
WHAT IS A COMPANY'S REGISTERED OFFICE? By Companies Act 1985, sec. 287 a company must at all times have a registered office to which all communications and notices may be addressed. When a new company is registered the address is specified on the Form 10. Any change in the address must be notified on Form 287. The change takes effect on the date the notice is registered, but any document may be served on the company at the old address until 14 days after that date (sec. 287(4)).
By Companies Act 1985, sec. 725 (1) a document may be served on a company by leaving it at, or sending it by post to, the company's registered office. The registered office must be in the country in which the company is registered: a Scottish company may not have its registered office in England or vice versa. There is, of course, nothing to stop a Scottish company having a place of business in England (or an English company having one in Scotland), but it must maintain a registered office within the country of its situation. See sec. 725(2) for service on a Scottish company in these circumstances. The address of the registered office must appear on all business letters, etc.: Companies Act 1985, sec. 351.
HOW IS A COMPANY'S REGISTERED OFFICE ADDRESS CHANGED? In the absence of any contrary provision in the memorandum and articles (which is extremely unlikely), the registered office address can be changed by a decision of the directors. A board meeting should be held and a resolution passed to that effect. Any change in the address must be notified on Form 287. The change takes effect on the date the notice is registered, but any document may be served on the company at the old address until 14 days after that date (Companies Act 1985, sec. 287(4)).
HOW MANY DIRECTORS MUST A COMPANY HAVE? A private company must have at least one director and a public company two: Companies Act 1985, sec. 282. Note, however, that every company must have a secretary and if there is only one director, that person cannot also be the secretary: sec. 283. There is no statutory maximum number of directors. Table A, article 64 provides: Unless otherwise determined by ordinary resolution, the number of directors (other than alternate directors) shall not be subject to any maximum but shall be not less than two.
HOW ARE DIRECTORS APPOINTED? The first directors are appointed by the subscribers to the memorandum and are named on form G 10 which is registered at Companies House when the company is formed. They automatically take office on the date of incorporation. Their names and other details should be entered in the register of directors once the company is formed: Companies Act 1985, section 10 and sec. 13 (5). Subsequent directors are appointed in accordance with the company's articles. Table A, article 78 provides that the general meeting may appoint directors (but note the procedures in TA 76-77).
By Companies Act 1985, sec. 292, in a PLC, separate resolutions are required for each director. By sec. 293, in a PLC or the subsidiary of a PLC, special notice of the director's age is required if the director is 70 or older. Such a person must disclose her/his age: sec. 294. The directors may appoint a director under article 79 of Table A, but such an appointee holds office only until the next AGM.
HOW DOES A DIRECTOR RESIGN? Unless there is a provision in the director's service contract requiring the director to give a period of notice, a director may resign at any time by notice to the company. Ideally, the notice of resignation should be in writing, but this is not specifically required. On receipt of the resignation, the company must: (1) notify Companies House on Form 288(b); (2) record the resignation in its register of directors.
Table A, article 81 provides that the office of a director shall be vacated if: he ceases to be a director by virtue of any provision of the Act or he becomes prohibited by law from being a director; or he becomes bankrupt or makes any arrangement or composition with his creditors generally; or he is, or may be, suffering from mental disorder and either: he is admitted to hospital in pursuance of an application for admission or treatment under the Mental Health Act 1983 or, in Scotland, an application for admission under the Mental Health (Scotland) Act 1960, or an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver, curator bonus or other person to exercise powers with respect to his property or affairs; or he resigns his office by notice to the company; or he shall for more than six consecutive months have been absent without permission of the directors from meetings of the directors held during that period and the directors resolve that his office be vacated.
HOW CAN A DIRECTOR BE REMOVED FROM OFFICE? Directors can be removed from office: under Companies Act 1985, sec. 303 by ordinary resolution; under provisions in the articles; if disqualified from acting. Removal by Ordinary resolution. Subject to the points made below, any director can be removed by an ordinary resolution of the general meeting under the following provisions of the Companies Act 1985. Companies Act 1985, sec. 303 (1) A company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him.
Special notice is required of a resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed. This section is not to be taken as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director, or as derogating from any power to remove a director which may exist apart from this section.
The special notice provisions are set out in sec. 379. This provides that the resolution is not effective unless notice of the intention to move it has been given to the company a least 28 before the meeting at which it is moved. The company must then give notice of the resolution at the same time and in the same manner as it gives notice of the meeting (or, if that is not practicable, must advertise in an appropriate newspaper).
The ability to remove a director by ordinary resolution cannot be excluded by the articles (see sec303 (1) above). It can in practice be avoided by inserting in the articles a provision usually known as a "Bushell v Faith clause". Such a clause confers enhanced voting rights on the director who is being removed (provided he or she is also a shareholder). Typical wording is: "Every director of the company has the following rights in the event of a poll being duly demanded at any general meeting:
(a) if the poll is so demanded on a resolution to remove that director from office, to (3) votes for each share held by her/him; and (b) if the poll is so demanded on a resolution to delete or amend the provisions of this article, to (3) votes for each share held by her/him."
Note that this clause can only a protect a director who is also a shareholder in the company, and the above wording will have to be modified to meet the circumstances of each case.
Removal under the articles. Table A, article 81 provides that the office of a director shall be vacated if: (a) he ceases to be a director by virtue of any provision of the Act or he becomes prohibited by law from being a director; or (b) he becomes bankrupt or makes any arrangement or composition with his creditors generally; or (c) he is, or may be, suffering from mental disorder and either: he is admitted to hospital in pursuance of an application for admission or treatment under the Mental Health Act 1983 or, in Scotland, an application for admission under the Mental Health (Scotland) Act 1960, or an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver, curator bonis or other person to exercise powers with respect to his property or affairs; or he resigns his office by notice to the company; or (e) he shall for more than six consecutive months have been absent without permission of the directors from meetings of the directors held during that period and the directors resolve that his office be vacated.
Other grounds could be added to the articles and/or provisions inserted to make it easier to remove a director.
WHO CAN BE A DIRECTOR? Disqualification's. Any person can be a director unless they have been disqualified from so acting under the Company Directors Disqualification Act 1986 or by being an undischarged bankrupt. Note also that a director or shadow director of a company which has gone into insolvent liquidation is prohibited for five years from being a director or shadow director, or being involved in the formation or running of a company which has the same, or a very similar, name to the liquidated company: Insolvency Act 1986, sec. 216.
Age limits. There is no minimum age limit, so young persons who are capable of fulfilling the duties of the position can be appointed. Companies Act 1985, sec. 293 imposes a maximum age limit of 70 years for directors of public companies and on private companies which are the subsidiaries of public companies. This age limit does not apply, however, if the company's articles exclude it or if the director's appointment is approved by the general meeting, having been given notice of his or her age.
Nationality. There are no statutory limitations as to nationality or residence, etc. It would be possible to include these in a company's articles, but this is very unusual.
Shareholding. The articles may impose a share qualification, but this is unusual in modern companies' articles. If a company has such a provision in its articles, the shares must be acquired within two months of appointment: Companies Act 1985, sec. 291.
Corporate directors. A company may be appointed as a director. The only limitation is in Companies Act 1985, sec. 283 (4), that a company cannot have as its sole director another company, the sole director of which is the secretary to the (first) company.
WHAT IS THE REGISTER OF DIRECTORS' INTERESTS? This is one of the company's statutory registers which must be kept available for inspection at the company's registered office or some other office notified to Companies House. It is a register of the interests each director has in the shares or debentures of the company (and related companies). It is not a register of outside interests.
By section 324 of the Companies Act 1985 every director is required to notify the company, in writing, of any interest he or she acquires (or any change in the interest) in the shares or debentures of the company, or its subsidiary or holding company, or a subsidiary of its holding company.
Within three working days of being notified of the interest the company must enter the information in its register of directors' interests: section 325. Unless there is an index, the directors' names should appear in alphabetical order, and the entries against each name should be in chronological order. Without any notification from the director, the company must enter on the register the details of any right granted to a director to subscribe for shares or debentures, including the date the right was given, the consideration for the grant (or a statement that there was none), the period within which the right is exercisable, and details of the shares or debentures affected. If the director exercises the right, the details of the exercise must also be entered in the register.
The legal requirement is that the register must contain details of all directors' "interests", a term which, by detailed rules in Schedule 13 of the Act, is defined as being far wider than outright ownership. It includes where the shares, etc. are held under a trust in which the director has an interest, or if any company which s/he controls (or has one-third or more of the voting shares) has an "interest" in them, or if s/he has a contractual right to the shares, etc. or is entitled to exercise any rights on them (e.g. voting rights). Each of persons having a joint interest is deemed to have the full interest. By section 328 the director is also deemed to have such interest as his or her spouse or infant child (unless the spouse is also a director of the company).
In the simple case of a director holding shares in the company in his or her own name, all that needs to be entered on the register is a statement such as: "registered as holder of 100 £1.00 shares in the company" (but note that any shares held by the director's spouse must also be shown as shares in which the director is interested, unless the spouse is also a director).
WHAT LEGAL LIABILITIES COULD DIRECTORS INCUR? This a large and complex area of law and only an outline can be given here. Reference should be made to one of the leading reference works on company law for a fuller account. Directors' legal duties fall into the following categories: general fiduciary duties imposed by the branch of the common law known as equity; the duty to observe care under the common law of negligence; duties under the Companies Acts, the Insolvency Act 1986 and related legislation, including for fraudulent and wrongful trading; duties imposed by the company itself; duties imposed by other legislation and common law provisions.
General fiduciary duties. Directors are subject to general duties imposed by equity. They are in a fiduciary relationship with the company and as such are bound to act bona fide, in what they consider to be the best interests of the company. There are many different aspects to these fiduciary duties, e.g.
Directors as quasi-trustees. Directors are entrusted with custody of the company's money and assets and are bound to use their own discretion in taking care of them. It is no excuse that the director was regarded as a nominee and acted on the instructions of another: Selangor United Rubber Estates v Cradock (1968) 1WLR 1555. Unauthorised profits. A very blatant example of this was shown in Boston Deep Sea Fishing Co v. Ansell (1888) 39 Ch D 339. A director who received personal payments from suppliers when placing orders on behalf of the company was held liable to account to the company for the payments.
But see also Regal (Hastings) v Gulliver (1942) 1 All ER 378. Here the company owned a cinema. It wished to acquire two further cinemas but was unable to raise sufficient money. A second company was set up in which Regal bought a majority of the shares and the directors of Regal (and the company's solicitor) bought the rest. The second company bought the two cinemas. Later the two companies were taken over. All shares in Regal and the second company were sold to another company. The directors were replaced. Regal sued the ex-directors for the profits they had made on their shares in the second company. Held: The directors' profits arose from their functions as directors of Regal and had not been authorised by the company. As such they were liable to account to the company for the profits. The principle that a director may not keep unauthorised profits is too important to allow any exceptions to be made.
Corporate opportunities. Directors may not take advantage of opportunities, information, etc. which belong to the company. See IDC v Cooley (1972) 2 All ER 162. Proper purpose. Directors must use their powers only for the purposes they were granted: Hogg v Cramphorn (1967) Ch 254.
In this case there was a take-over bid for the company. Directors worried that a majority of the shareholders may accept the bid. The directors set up a trust for the benefit of employees with themselves as trustees. The company made a loan to the trust with which the trust bought newly issued shares in the company. The directors then had sufficient shares under their control to defeat the takeover bid. A shareholder challenged the whole operation. Held: The whole scheme was void. The directors' main purpose had been to defeat the takeover bid. This was an abuse of their powers to allot shares, the proper purpose of which is to enable the company to raise finance.
Duties owed to the company. Directors' duties are owed to the company, not to the individual members of it: Percival v Wright (1902) 2 Ch 421. Generally only the company may sue (rule in Foss v Harbottle (1843) 2 Hare 461).
Duty of care. Directors owe the company a duty to take care in the course of their duties. The standard is that of the reasonable person who has that particular director's degree of skill, knowledge and experience: Re City Equitable Fire Assurance CO (1925) Ch 407. This is an aspect of the general common law of negligence. The articles of a company cannot exempt directors from liability for negligence, but the company may purchase insurance indemnifying directors against liability for negligence: Companies Act 1985, sec. 310.
Companies legislation. The Companies Acts 1985 to 1989, the Insolvency Act 1986 and related legislation lay down a regulatory framework for the management and conduct of companies. Many sections of these Acts require companies to send information to Companies House, hold certain meetings, or to do or refrain from certain actions in particular circumstances. Much of this legislation imposes potential liabilities for non-compliance on the company and, usually, 'on every officer in default'. Directors, along with the company secretary, are the officers who are potentially liable for any such default. Prosecution for regulatory offences (not filing information at Companies House, etc.) is rare, though not unknown.
Potentially more serious are the liabilities which may be incurred on a director personally when a company has become insolvent and it appears that there has been fraudulent or wrongful trading.
Fraudulent trading. Fraudulent trading is where any business of the company has been carried on with intent to defraud creditors or for any fraudulent purpose: Insolvency Act (IA) 1986, sec.213. This includes where debts have been incurred by a company knowing that they cannot be paid. Note, however, that fraudulent intent must be shown.
Possible court orders: Any person knowingly a party to the fraud may be made liable to contribute to the company's assets: IA, 1986, sec. 213(2); May be convicted and imprisoned and/or fined: Companies Act 1985, sec. 458; Directors disqualification order up to 15 years: Company Directors Disqualification Act (CDDA) 1986, sec 4.
Wrongful trading. This is where a company has gone into insolvent liquidation and it appears to the court that any person who has been a director of the company knew or ought to have known that this would occur and failed to take all reasonable steps to minimise the loss to the creditors: Insolvency Act 1986, sec214. Keeping a company in a situation where it is trading at a loss, so increasing the deficit to creditors, rather than ceasing to trade or putting the company into liquidation, is clear failure to take such steps. No fraudulent intention is required. The company may impose duties on its directors by its memorandum and articles and by delegation by the board of functions to particular directors. General Law. Directors are responsible for seeing that the company is run lawfully, i.e. in accordance with the general law.
WHAT POWERS DO DIRECTORS HAVE? Directors have such powers as are conferred on them by the memorandum and articles of the company. Most modern companies have the following provisions of Table A:
Powers of directors. Subject to the provisions of the Act, the memorandum and the articles and to any directions given by special resolution, the business of the company shall be managed by the directors who may exercise all the powers of the company.... The powers given by this regulation shall not be limited by any special power given to the directors by the articles and a meeting of directors at which a quorum is present may exercise all powers exercisable by the directors. In other words, the directors have the power to deal with any particular matter unless the Act, the articles or a (previously passed) special resolution says to the contrary.
Most companies do not have special articles and most have not passed special resolutions to restrict the directors' powers, so the reality is that in most companies the directors can make any decision unless the Act says it needs a resolution in general meeting is required.
The following is a list of the more commonplace decisions which must be made by the general meeting (and the type of resolution required): Change company's name (special resolution): Companies Act 1985, sec. 28. Change objects (special resolution): Companies Act 1985, sec. 4. Change articles (special resolution): Companies Act 1985, sec.9. Increase authorised share capital (ordinary resolution): Companies Act 1985, sec. 121. Exempt the company from holding AGMs (elective resolution): Companies Act 1985, sec. 366A. Wind up the company (type of resolution depends on the circumstances) Insolvency Act, 1986, sec. 84.
The directors may, by power of attorney or otherwise, appoint any person to be the agent of the company for such purposes and on such conditions as they determine, including authority for the agent to delegate all or any of his powers. The directors may delegate any of their powers to any committee consisting of one or more directors. They may also delegate to any managing director or any director holding any other executive office such of their powers as they consider desirable to be exercised by him. Any such delegation may be made subject to any conditions the directors may impose, and either collaterally with or to the exclusion of their own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee with two or more members shall be governed by the articles regulating the proceedings of directors so far as they are capable of applying.
Subject to the provisions of the Act, the directors may appoint one or more of their number to the office of managing director or to any other executive office under the company and may enter into an agreement or arrangement with any director for his employment by the company or for the provision by him of any services outside the scope of the ordinary duties of a director. Any such appointment, agreement or arrangement may be made upon such terms as the directors determine and they may remunerate any such director for his services as they think fit. Any appointment of a director to an executive office shall terminate if he ceases to be a director but without prejudice to any claim to damages for breach of the contract of service between the director and the company. A managing director and a director holding any other executive office shall not be subject to retirement by rotation.
A company with these provisions in its articles should resolve at a board meeting to confer appropriate powers on the various executive directors, together with any limitations on the powers so conferred (e.g. financial limits, areas of competence, etc.) and see that these are clearly minuted. Such resolutions will confer actual authority on the directors concerned. If a director exceeds his or her actual authority when dealing with those outside the company, the acts will still bind the company if the director was acting within his or her apparent or ostensible authority: Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd (1964) 2 QB 480, CA; Hely-Hutchinson v. Brayhead Ltd (1968) 1 QB 549, CA.
Detailed consideration of the agency rules as they apply to directors (often referred to as the rule in Turquand's case: Royal British Bank v. Turquand (1856) E & B 327, 119 ER 886) is beyond the scope of this database.
ARE DIRECTORS EMPLOYEES OF THE COMPANY? Being a director does not, of itself, make that person an employee of the company. A directorship is an office, not necessarily an employment. If, however, the company enters into a service contract with the director, the terms of which make the director an employee under the usual common law test, then the director becomes an employee. Many company directors are in this position. In these circumstances, relevant aspects of employment law (including statutory protection as to unfair dismissal and redundancy) apply in addition to the law relating to directors.
Subject to the company's articles, the board has power (as part of its general powers of management) to award service contracts to directors and others. Note, however, that Companies Act 1985, sec. 319 requires any fixed term contract (which cannot be terminated by notice) to be approved by an ordinary resolution in general meeting. Like all directors' powers, granting a service contract must be done bona fide for the benefit of the company.
RELEVANT TABLE A PROVISIONS ARE: DIRECTORS' APPOINTMENTS AND INTERESTS Subject to the provisions of the Act, the directors may appoint one or more of their number to the office of managing director or to any other executive office under the company and may enter into an agreement or arrangement with any director for his employment by the company or for the provision by him of any services outside the scope of the ordinary duties of a director. Any such appointment, agreement or arrangement may be made upon such terms as the directors determine and they may remunerate any such director for his services as they think fit. Any appointment of a director to an executive office shall terminate if he ceases to be a director but without prejudice to any claim to damages for breach of the contract of service between the director and the company. A managing director and a director holding any other executive office shall not be subject to retirement by rotation.
Directors' gratuities and pensions. The directors may provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any director whom has held but no longer holds any executive office or employment with the company or with any body corporate which is or has been a subsidiary of the company or a predecessor in business of the company or of any such subsidiary, and for any member of his family (including a spouse and a former spouse) or any person who is or was dependent on him, and may (as well before as after he ceases to hold such office or employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.
Conflict of interests. Where proposals are under consideration concerning the appointment of two or more directors to offices or employment's with the company or any body corporate in which the company is interested the proposals may be divided and considered in relation to each directors separately and (provided he is not for another reason precluded from voting) each of the directors concerned shall be entitled to vote and be counted in the quorum in respect of each resolution except that concerning his own appointment.
WHAT IS THE LEGAL POSITION OF A MANAGING DIRECTOR? The legal position of a managing director in any particular company will depend on the company's memorandum and articles, the terms of any service contract the MD has with the company and what powers have been invested in her/him by the board. The relevant Table A provision is:
Subject to the provisions of the Act, the directors may appoint one or more of their number to the office of managing director or to any other executive office under the company and may enter into an agreement or arrangement with any director for his employment by the company or for the provision by him of any services outside the scope of the ordinary duties of a director. Any such appointment, agreement or arrangement may be made upon such terms as the directors determine and they may remunerate any such director for his services as they think fit. Any appointment of a director to an executive office shall terminate if he ceases to be a director but without prejudice to any claim to damages for breach of the contract of service between the director and the company. A managing director and a director holding any other executive office shall not be subject to retirement by rotation.
Most companies have this provision. The actual authority of the managing director to act for the company depends on the powers vested in her/him by the board, either by resolution (which should be minuted) or by the terms of a service agreement. The ostensible authority of a managing director will depend on all the circumstances but, based on the title alone, will be very wide: Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd (1964) 2 QB 480, CA; Hely-Hutchinson v. Brayhead Ltd (1968) 1 QB 549, CA. A person appointed as a 'Chief Executive Officer' will be in the same position as a managing director.
MUST A COMPANY HAVE A COMPANY SECRETARY? Yes. Companies Act 1985, sec. 283 (1) provides that every company shall have a secretary. A sole director shall not also be secretary. No company shall: have as secretary to the company a corporation the sole director of which is a sole director of the company; have as sole director of the company a corporation the sole director of which is secretary to the company.
So, even after the Companies (Single Member Private Limited Companies) Regulations SI 1992/1699 brought in the single member company, it is still necessary to have a secretary, and if the company has only one director, that person cannot be the secretary. On the other hand, corporate secretaries are permitted. Note also the following regulations about the qualification of the secretary of a public company:
Sec. 286 (1) It is the duty of the directors of a public company to take all reasonable steps to secure that the secretary is a person who appears to have the requisite knowledge and experience to discharge the functions of secretary and who: on 22.12.80 held the held the office of secretary or assistant or deputy secretary of the company; or for at least 3 of the 5 years immediately preceding his appointment as secretary held the office of secretary of a company other than a private company; or is a member of any of the following: Institute of Chartered Accountants (of England and Wales, Scotland or Ireland); Chartered Association of Certified Accountants; Institute of Chartered Secretaries and Administrators; Institute of Cost and Management Accountants; Chartered Institute of Public Finance and Accountancy. Is a barrister, advocate or solicitor called or admitted in any part of the UK; or is a person who, by virtue of his holding or having held any other position or his being a member of any other body, appears to the directors to be capable of discharging those functions.
The first secretary is named on the form 10 when a new company is formed (CA 1985, sec13(5)). Subsequent secretaries are appointed in accordance with the articles. Table A, article 99 provides: Subject to the provisions of the Act, the secretary shall be appointed by the directors for such term, at such remuneration and upon such conditions as they may think fit; and any secretary so appointed may be removed by them.
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Companies Law
Company Registered Office, Director and Secretary
