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Jordans FAQs: Too many directors?

12th Nov 2013
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Q:           I am a director of a company which has A and B directors. I am an A director, and have an alternate, and there are two B directors, who both have an alternate directors. I have been reviewing the articles, and they state that there should only be two A directors and two B directors. Are there too many B directors?

A:            The Companies Act defines a director as "any person occupying the position of director by whatever name called" (Companies Act 2006, section 250). It is generally accepted that this also includes alternate directors and therefore there is a requirement to notify the Registrar of appointments and resignations of alternate directors (CA 2006 section 167).

Each director (whether a ‘full director’ or an alternate) has to fulfil their duties and responsibilities placed upon them legally, and can be held liable if things go wrong or they are not seen to be discharging their duties and responsibilities accordingly. 'Externally' the company has six directors, and it would appear that there are too many directors.

The passing of resolutions in board meetings and written resolutions by alternates is generally governed by the company's articles, which usually state that alternates may count in the quorum of board meetings and vote at board meetings and on written resolutions only where the appointor is not participating. On this basis, only three directors can vote at any one time, and only two of the B directors can be counted at one time, which means the company does not have too many B directors. 

For more information go to www.jordans.co.uk

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