All UK companies must appoint at least one real person as a company director. The person must be at least 16 years of age. They can be resident anywhere in the world.
Some companies choose to appoint a corporate director in addition. This is a company acting as a director of another company. When a corporate director is being used a person must also be appointed as a company director.
UK companies can appoint a corporate director as one of the company officers. This may be a UK company or another company from anywhere in the world. It is occasionally seen in large group structures but is not very common.
Before the Companies Act 2006 was implemented it was possible to appoint a company to act as the sole director. This also allowed companies to use another company as nominee directors. However, due to the requirement to appoint a real person as a director, this practice is less common.
A nominee director service is typically used when the real operators of the company do not wish to put their details on the public register.
Historically this service was provided by agents that kept a dormant company specifically for use as a nominee company director. Changes to the Companies Act now mean that a real person has to be appointed to all UK companies which made this option no longer possible.
It is still possible to purchase a nominee director service from some service providers. This is often achieved by appointing a person from an offshore location as the company director. They will typically issue a power of attorney to the real business owners.
In general, the use of nominee director services is not recommended. Allowing a person, unknown to you, to be the sole director of your company may be a risk. It can also prevent the company from getting a UK bank account as the banks are not able to conduct credit checks. Without a UK bank account, it is very difficult to trade.
If you simply need to keep your personal address out of the public domain then nominee director services are not necessary. Companies now allow a director to declare a ‘service address’ on the public record. A service address can be an office, factory, shop or you may choose to buy a directors service address from a reputable provider. Combined with a registered office service this keeps directors residential addresses out of the public eye.
Should you use a Nominee Director?
Nominee directors are most uncommon in the UK and normally restrict the business when opening bank accounts. Before paying hundreds of pounds to an agent make sure the service is suitable for your company. You must also consider the PSC regulations when choosing to appoint a nominee director. These regulations mean the individuals with control over the company are listed on the public database.