Section 87 of the Act inserts a new section 156A in the CA 2006 which specifies that all directors must be natural persons and prohibits the appointment of corporate directors. An appointment made in contravention of this section is void. Section 156A is subject to section 156B which is considered below.
A new section 156B gives the Secretary of State the power to make regulations setting out the exceptions to the general requirement that directors must be natural persons, but no such exceptions are set out in the Act. The regulations must specify the circumstances in which, and any conditions subject to which, the appointment may be made.
The transition period for companies with corporate directors is dealt with in a new section 156C of the CA 2006. This provides that after one year of section 156A coming into force, any remaining corporate directors will cease to be directors (subject to any exceptions set out in regulations made under section 156B).
This is due to come into force in October 2016.
It is therefore imperative that any entrepreneurs or investors that use corporate directors develop a strategy for dealing with the change in appointment of corporate directors well in advance of the implementation of the new Act.
We have offices in London, Birmingham, Oxford, Cambridge, Northampton and Market Harborough (all by appointment only).
