Single director companies are permitted since 1st June 2015 and corporate directors are not permitted. The directors can be of any nationality and must be 18 years of age or over. Two officers are required therefore in the case of a single director company an alternate must be appointed company secretary.
Section 10 of the Act changes the requirement that at least one of the directors be resident in the EU.
Where there is no director of the company whom will be resident in the EU the alternative of a Non Resident Director Bond can be put in place.
No formal qualification is required to become a director but the following may not become a company director:
- Individuals with 25 Irish directorships at any one given time
- Body corporate – a limited company
- Un-discharged bankrupt
- The auditor of the company
- If disqualified by the High Court from being a director
- A person who has been convicted of an indictable offence under
the Companies Acts
The directors of a company are the people who are appointed by the shareholders to run and manage the day to day affairs of the company.
Directors’ Statutory Disclosure Requirements
A company director who is in any way, whether directly or indirectly, interested in a contract (or proposed contract) with the company is required to declare the nature of that interest in the contract at a meeting of the directors of the company.
Company Director Responsibilities
A company is owned by its members or shareholders. Directors are appointed by the shareholders of the company but can also be appointed by the other directors where the articles of association allow. The role of the directors is to manage the company on behalf of the shareholders. The articles of association usually provide for the delegation of the shareholders management powers to the board of directors and many of the functions of the directors are set out in a company’s articles of association.
A company director should be familiar with the legal responsibilities and obligations attached to the position. A company directors may also act as the company secretary.
Qualifications Required to become a Company Director
A person requires no formal qualifications to become a company director. A director is not required to be a member or shareholder of the company unless the articles of association specifically so provide.
Company Directors’ Duties and Obligations
Company directors’ responsibilities are wide and diverse. As the vast majority of Irish companies are private companies, there are a substantial number of companies of which the directors and members are one and the same. Under such circumstances, the distinction between the company’s property and the director/member’s own property can be a matter of some confusion with the result that the directors treat company property as though it was their own. A company director stands in a special relationship to the company of which they are an officer. This special position is known as a ‘fiduciary position’ and the director is known as a ‘fiduciary’. A fiduciary is required to act in a manner which is legally becoming of their office and which places the interests of the company ahead of their own. A director is also obliged to have regard to the interests of the company’s employees.
Company Director Duties
A director, as an officer of a company, is under a duty to comply with his obligations under the Companies Acts and to ensure that the requirements of the Companies Act are complied with by the company. A director is in breach of this duty where they authorise or permit a default to take place. A director is presumed to have permitted a default by the company unless the director can establish that he took all reasonable steps to prevent it or, due to circumstances beyond their control, was unable to do so.
Where a director, in purported compliance with any provision of the Companies Act, answers a question, makes a statement or produces a document which he knows to be false or is reckless, they are in breach of the Acts.
A connected person is defined in the Companies Act. In general a person is connected with a director of a company if he/she is a near relative, being related by blood or marriage, is in business partnership with the company director or if he/she acts as trustee for a trust the principal beneficiaries of which are the director. Near relatives includes a spouse of the director or any body corporate which the director has a controlling interest.
The company is also deemed to be connected with a director if it is controlled by that director. It is presumed that the sole shareholder of a single member company is connected with a director of that company.
Duty to Maintain Books of Account
Under section 202 of the Companies Act, 1990, every company is required to maintain proper books of account. The directors of the company are required to ensure that this requirement is complied with.
Duty to Prepare Financial Statements
Companies are required to prepare accounts on an annual basis. The annual accounts are prepared from the information contained in the company’s books of account and other relevant information. The accounts are required to give a true and fair view of the company’s financial affairs. You are obliged to annex a copy of the accounts when filing an annual return with the Companies Registration Office.
Duty to Maintain Registers
Every company has a legal obligation to maintain certain registers and other documents. Company directors are responsible for ensuring that companies comply with their obligations in this regard and, consequently, directors are responsible for ensuring that these records are maintained, updated as appropriate and made available to the appropriate parties.
Duty to File Documents with the Registrar of Companies
Company directors are legally obliged to ensure that certain documents are filed with the Registrar of Companies. Some are required to be filed by every company e.g. the annual return while others are required to be filed only in certain circumstances e.g. on the death of a director. Once filed with the Registrar, these become public documents and are open to inspection by any member of the public at the Companies Registration Office.
General Meetings of the Company
Company law provides for two types of the meeting of a company, namely an Annual General Meeting and an Extraordinary General Meeting. General meetings of the company are meetings of the members and the directors at which certain company business is conducted. Annual General Meeting In general, every company is required to hold an annual general meeting (AGM) annually.
Company Directors’ Powers
A company’s directors act on behalf of the company. They only have powers to do what the company itself is legally entitled to do. The powers that directors have are those which have been conferred upon them by the company, usually via the company’s articles of association. These powers are formally exercised by a resolution at a board meeting, usually decided by a majority of votes.
Resignation of Directors
Should there be a change in directors of a company or a change of residential address for a director it is required that the Registrar of Companies be notified within 28 days of the change. Documents notifying the Registrar of a change are required to be signed by a current director. A director cannot resign from a company without the knowledge of the other directors.