MH Corporate

Tuesday 9 June 2015

End of the corporate director… or not

Currently in the UK, companies are permitted to appoint directors who are corporate entities rather than individuals/natural persons. However, under the Companies Act 2006 all companies must have at least one director who is a natural person at all times.

Only just over one per cent. of UK companies use corporate directors. There are several reasons why it may be attractive or beneficial for companies to appoint corporate directors, such as administrative flexibility and efficiency. A corporate director could remain constant without the need to effect frequent appointments and resignations of individual directors. A parent company may also wish to directly control how its subsidiaries are run and may do so by it, or another group company, being appointed as a director of the subsidiaries.