News: Director deadline looms
Rebecca Stopford, Commercial Partner with Rotherham's Oxley and Coward Solicitors LLP, is warning local businesses that the September 30 deadline is fast approaching for every company to have at least one director who is an individual and not a corporation.
In the past it was commonplace for subsidiary companies of a group of companies to have just one director - and for that director to be a corporation rather than a real person.
Under the provisions of the Companies Act 2006, this is no longer allowed. From October 1, every company must have at least one director who is a "natural person" as the act puts it: that is to say, an individual (living!) human being as opposed to a corporate entity.
Transitional provisions gave companies with a sole corporate director a period of grace to appoint a real person as a director, but this grace period expires at the end of the month. After the 30 September, any company that remains without at least one individual 'natural person' director will be liable to a fine of £5,000 plus a daily default fine until the situation is resolved.
Rebecca said: "Clearly any company still in this situation must now act very quickly and take legal advice as to the formalities required to appoint an additional or replacement director.
"Oxley and Coward have a great deal of experience in helping companies who find themselves in need of urgent advice, but all concerned really need to act now to avoid the threat of punitive fines."
Oxley & Coward website
In the past it was commonplace for subsidiary companies of a group of companies to have just one director - and for that director to be a corporation rather than a real person.
Under the provisions of the Companies Act 2006, this is no longer allowed. From October 1, every company must have at least one director who is a "natural person" as the act puts it: that is to say, an individual (living!) human being as opposed to a corporate entity.
Transitional provisions gave companies with a sole corporate director a period of grace to appoint a real person as a director, but this grace period expires at the end of the month. After the 30 September, any company that remains without at least one individual 'natural person' director will be liable to a fine of £5,000 plus a daily default fine until the situation is resolved.
Rebecca said: "Clearly any company still in this situation must now act very quickly and take legal advice as to the formalities required to appoint an additional or replacement director.
"Oxley and Coward have a great deal of experience in helping companies who find themselves in need of urgent advice, but all concerned really need to act now to avoid the threat of punitive fines."
Oxley & Coward website
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