Companies Act 2006

Introduction date

Introduction date: 1 October 2010

Summary

Limited companies should review their board and, if it only has corporate directors, ensure that at least one human being is appointed immediately. Most firms now have human directors in place following the change in the law of October 2009, but some companies remain with boards made up of solely of other companies.

If you were a company that on 8 November 2006 only had corporate directors, the Companies Act that stipulated human directors should be part of the board provided a period of grace that allowed you to recruit one by 2010. This period expires on 1 October 2010, and now every UK limited company must have at least one human director.

This final provision of the Companies Act applies even if the company does nothing - for example, it may have been set up for name protection purposes only, or it may be a company that just holds one asset year-on-year. Breach of the new rule can result in a hefty fine.