When starting a company and registering as a limited company at Companies House in the UK, every business must have one Director and one Shareholder, which is in most cases the founder/owner and can often initially be one and the same person.
As businesses grow, and gain second, third directors, a board of directors is formed. Most people can hold a director position, however there are a few cases in which you may not, which we cover below.
How old must you be to be a company director?
There is no upper limit in age for a person to be a director of a company, however in the UK there is a minimum age limit for a person to hold a director position, as set out in Section 157 CA2006 of the Companies Act 2006. The first line reads, "A person may not be appointed a director of a company unless he has attained the age of 16 years.
The Act also states that if a company has a director who is underage on the implementation date, directorship ceases and amendments must be made.
This is not the case with shareholders however. While a person can be both a shareholder and a director simultaneously if over 16, (and as we have mentioned is often the case in a start-up company) a child under 16 can in fact own shares.
Although many companies will not allow persons under the age of 18 to be a shareholder, in some companies, particularly family businesses, shares can be given to children. This can be as part of a longer-term inheritance, or as a way of paying different rates of dividends to different classes of shares (for more information on children owning shares see here).
Are there any exceptions to becoming a director?
Most individuals can qualify to be a director of a company in the UK, provided they are of legal age. It is generally advised that while directors can be 16, 18 is recommended, as with that being the legally recognised age for an adult in the UK; should anything be signed by an under 18 could be challenged.
Other than legal age there are of course a few exceptions. A person cannot be appointed a company director if:
- They have been disqualified, in any way, from being a company director (Company Directors Disqualification Act 1986)
- They have are an undischarged bankrupt; someone who is under financial restrictions of bankruptcy, unless they have court permission
- They have been a director or a shadow director of another company with the same or very similar name to one which went into liquidation in the last 5 years (Insolvency Act 1986, sec216)
Who can be a company director in the UK?
So – to be appointed as a director of a company in the UK you must be at least 16 years old, not be a ‘disqualified director’ or be an undischarged bankrupt.
It does not matter if a director is a UK resident or not, and directors of a company may be a director of more than one company (unless this may cause a conflict of interest, see our blog on conflicts of interest here).
Directors are legally responsible for running the company, so qualifying to be a director of a company is very different to understanding and upholding the responsibilities of a director once in post!
You can find out more about different types of directors, directors responsibilities and board roles in our director training courses here.
As your next read, why not see our blog '10 qualities for an ideal Non-Executive director?'
For more information on Company Director disqualification please visit gov.uk
For more information on the Companies Act please visit legislation.gov.uk.