Under the previous Companies Act 1985 it was possible to appoint a director of any age without restriction to a private limited company (subject to the company's articles). It was not recommended to do this as any company controlled in full or in part by a minor will struggle to access banking products and to authorise contracts due to their age.
What is changing in October 2008? The Companies Act 2006 section 157 has introduced a minimum age for a director of 16 years old, this comes into force on 1st October 2008.
What will happen to existing directors under the age of 16 on the 1st October 2008? Existing under-age directorships will cease, with no notification to the Registrar required. Companies House will resign all underage directors but you may want to file the necessary forms in advance to ensure this does happen.
Is the company required to amend any company records? Yes, the company will be required to amend the Register of Directors to reflect the fact that the appointment has ceased.
Will the under age directors’ rules apply retrospectively? Yes. When a person appointed as a director of a company before section 157 (minimum age for appointment as director) comes into force, has not attained the age of 16 by 1st October 2008, that person ceases to be a director.
What if as a consequence of the changes, the company is left without an eligible director? Companies without an eligible director will be in default and will need to appoint at least one director to remedy the position. Failure to comply with the new legislation could result in the company being issued penalties and fines.
Dated 23/07/2008
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