6 things to do when appointing a new director

business partners shaking hands in agreement

If you have a limited company, you will know that it cannot be formed without both a director and a shareholder. However, once you have started business and you have got to the point of appointing subsequent new director(s), what do you need to do? 

As with anything regarding company information it is important to ensure you file the details correctly, but there are other things you may want to consider. 

Here we cover six things you should do when appointing a new director…

1. Double check restrictions

You could be appointing someone additional to the board, or replacing a current director. Either way it is the responsibility of the board to make sure the potential candidate is suitable and not exempt for any reason. 

(You may find our blog ‘Who can be a company director' useful!)

 

2. Create a service contract

Every executive director must have a contract by law. The Companies Act 2006 says that a copy of this must be held at the company’s registered office address (see our blog on ‘What is a registered office’).

The service contract details the agreement between the company and the director, detailing things such as start date, remuneration, notice period and so on.

 

3. Approve the appointment

Your company’s existing board will generally be responsible for the process of appointing a new director. When you register a limited company you have to have a director, and then any subsequent appointments are detailed in the company’s articles (articles of association). 

Usually an ordinary resolution of either the board or shareholders will suffice for approving a new director, but there are exceptions, and it is worth checking your articles of association first (again see Companies Act 2006). 

 

4. Confirm new director details

You will need to confirm details of your new director such as date of appointment, name, date of birth etc, a number of which you will have covered in the service contract. It is important to have these details correct as you will need them for filing, and for your company’s registers.

 

5. Update Company Registers

Once you have a new appointment you must update your company’s register of directors and register of directors’ residential addresses.

The register of directors is a document that can be requested and inspected, however the register of residential addresses is not public.

 

6. Filing requirements

Whenever you make a new director appointment, you have to file this information with Companies House within 14 days. There is a specific form online for this, the AP01, which can be found here.

Remember – you also have to inform Companies House should you be removing a director too, this must also must be done within 14 days of the removal.

Download appointing new director checklist


Read our blog ‘10 qualities for an ideal Non-Executive director’

Read our blog ‘5 tips for improving your board of directors’ skills’

Check out our Action Planning Tool.

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