When you set up a limited company in the UK, you need at least one director and one shareholder. Often, especially in new businesses, this is the same person – the founder.
As companies grow and add more directors, a board forms. Most people can become directors, but there are some important rules to know.
Age requirements
You must be at least 16 years old to be a company director in the UK. This is set out in law under Section 157 of the Companies Act 2006.
There’s no upper age limit – you can be a director at any age above 16.
That said, many experts recommend waiting until 18. This is because 18 is the age when you’re legally recognised as an adult in the UK. Any contracts signed by someone under 18 could potentially be challenged.
What about shareholders?
Shareholders are different. Children under 16 can own shares in a company, even though they can’t be directors. This happens quite often in family businesses, where shares might be given to children as part of inheritance planning.
Who can’t be a director?
Most people can become directors, but you’re not allowed if:
- You’ve been disqualified from being a director by a court
- You’re an undischarged bankrupt – unless you have special permission from the court
- You were a director of a company that went into liquidation in the last five years, and you’re trying to use the same or a very similar company name
These rules exist to protect businesses and creditors.
Other important points
- You don’t need to be a UK resident to be a director
- You can be a director of multiple companies (unless this creates a conflict of interest)
- Directors from anywhere in the world can serve on UK company boards
Qualifying vs performing the role
Meeting the basic requirements to become a director is straightforward. The real challenge comes once you’re in post.
Directors have serious legal responsibilities. They must act in the company’s best interests, follow the law, and make sound decisions. Understanding these duties is crucial.
Keeping track of director responsibilities, managing board meetings, and staying on top of compliance can be complex – especially as your board grows. Tools like governance360 can help you manage director information, track responsibilities, and ensure your board stays compliant without the paperwork headaches.
Want to learn more?
If you’re thinking about taking on a director role, it’s worth understanding what’s expected of you. The governance and legal requirements can seem daunting, but with the right knowledge and systems in place, you can focus on what matters – growing your business.
Further reading:
- Company Directors Disqualification guidance on GOV.UK
- Companies Act 2006 full text