Single Director Companies - The Buck Stops With You
Written by 22nd July 2014on
Presently, under the Companies Acts 1963-2013, a company is required to have at least 2 directors at all times.
Under the Companies Act 2014 due to come into effect on 1 June 2015, an individual will be able to set up a company and name themselves as sole director. From a corporate governance perspective, this would render the sole director solely responsible for the company. The individual would not share their director's duties with another and therefore have the sole responsibility to ensure compliance with regulations and attend to all filing requirements most notably the annual return. The change is also recognition of the reality that often a sole individual's entrepreneurship leads to successful businesses and the second director often does not participate in the day-to-day management of the company and is only there to fill a legal requirement.
However, a company will still be required to have a secretary and a sole director cannot also be the secretary. The director will have a duty to appoint someone with the requisite skills for the role. This can be a corporate body, such as a company secretarial ("CoSec") services provider. Using a CoSec provider would allow the individual to set up a company without needing to entice a second individual into the venture.
It will remain the case that a corporate body cannot be appointed as a director.
These changes will particularly assist start-up companies by reducing the barriers to entry and encouraging growth in the economy. Individuals will require a separate company secretary; LK Shields can assist by providing companies with the CoSec services they require.