Guide

Check before appointing company directors

How to verify a person is eligible to be a company director before you appoint them. Covers the disqualified directors register, bankruptcy restrictions, sanctions checks, and other legal eligibility requirements.

UK-wide Public Limited Company

Before appointing a company director, you must check they are legally eligible to hold the position. Appointing an ineligible person - particularly someone who is disqualified - exposes your company to serious risk and could make you personally liable for debts incurred while they acted as director.

This guide explains the checks you should carry out and why they matter.

Who cannot be a company director?

Certain people are legally prohibited from acting as company directors:

  • Disqualified directors - anyone subject to a disqualification order or undertaking under the Company Directors Disqualification Act 1986
  • Undischarged bankrupts - anyone who is bankrupt and has not been discharged, or is subject to a bankruptcy restrictions order
  • Sanctioned individuals - anyone subject to director disqualification sanctions under UK sanctions legislation
  • Under 16s - no one under the age of 16 can be appointed as a company director (Companies Act 2006, s.157)

In addition, some professions (such as solicitors or accountants) may have their own restrictions on holding directorships in certain circumstances.

Why checking matters

If you appoint a disqualified person as a director, or allow them to manage your company, you face serious consequences:

  1. Personal liability for company debts

    Under section 15 of the CDDA 1986, if you act on the instructions of someone you know is disqualified, you become jointly and severally liable for all debts the company incurs while they are involved in management.

  2. Corporate governance failures

    Appointing an ineligible director may invalidate board decisions, create problems with contracts, and expose the company to regulatory action.

  3. Reputational damage

    News that your company appointed a disqualified director can damage relationships with customers, investors, and suppliers.

  4. Companies House rejection

    Companies House will reject appointments of people whose names match the disqualified directors register. However, this is not foolproof - variations in spelling or use of different names may slip through.

Step 1: Search the disqualified directors register

Companies House maintains a public register of all disqualified directors. This is a free service and your first essential check.

Step 2: Check for bankruptcy

An undischarged bankrupt cannot act as a company director. Unlike disqualification, bankruptcy is an automatic prohibition that applies from the moment of the bankruptcy order.

You can search:

  • Individual Insolvency Register - maintained by the Insolvency Service, covers bankruptcies, individual voluntary arrangements, and debt relief orders
  • Credit reference checks - a standard credit check will show bankruptcy

Note: Bankruptcy is normally discharged after 12 months, but bankruptcy restrictions orders can extend the prohibition for up to 15 years.

Step 3: Verify identity and age

Basic due diligence should confirm:

  • Identity - the person is who they claim to be (check passport or driving licence)
  • Age - they are at least 16 years old
  • Right to work - while not strictly required for directors, if they will also be an employee you must check this

Ask for their date of birth and verify it matches the identity documents. Companies House requires director date of birth on appointment forms.

Step 4: Consider sanctions checks

If you operate in regulated sectors or deal internationally, you may need to check whether the proposed director is subject to UK or international sanctions. The UK government maintains a consolidated list of sanctioned individuals.

Even outside regulated sectors, appointing a sanctioned individual creates serious legal and reputational risk.

Step 5: Review professional standing

For certain sectors or roles, additional checks may be appropriate:

  • Professional qualifications - if appointing a finance director, verify their accountancy qualifications
  • Regulatory status - for FCA-regulated firms, check the Financial Services Register for approved persons
  • Previous directorships - review their Companies House filing history for dissolved companies or patterns of concern
  • References - speak to previous employers or co-directors

Step 6: Self-declaration

As part of the appointment process, ask the proposed director to confirm in writing that they are not:

  • Subject to a disqualification order or undertaking
  • An undischarged bankrupt
  • Subject to sanctions
  • Otherwise prohibited from acting as a director

While this does not replace your own checks, a written declaration creates a record and may provide some protection if the person has concealed their status.

PUBLIC LIMITED COMPANY Requirement

Additional requirements for PLCs

Public limited companies have additional governance requirements. Directors of PLCs are subject to greater scrutiny and may need to meet fit and proper person requirements if the company operates in regulated sectors.

Listed companies must also comply with the UK Corporate Governance Code, which includes provisions on board composition and director appointments.

What to do if you discover a problem

If your checks reveal that a proposed director is disqualified or otherwise ineligible:

  • Do not proceed with the appointment
  • Document your findings and the reason for not appointing
  • If the person has already been acting informally in a management role, stop immediately and seek legal advice
  • If you discover an existing director has become disqualified (through a new order), they must resign immediately

  1. Search the disqualified directors register

    Use the free Companies House service to check if anyone is currently disqualified. Search by name - try variations and maiden names.

  2. Check the Individual Insolvency Register

    Verify the proposed director is not an undischarged bankrupt or subject to bankruptcy restrictions.

  3. Verify identity documents

    Check passport or driving licence to confirm identity and age (must be 16+).

  4. Request a self-declaration

    Ask the proposed director to confirm in writing they are eligible to act.

  5. Keep records of all checks

    Document what you checked, when, and the results. Retain for the duration of their appointment.

Director disqualification - what you need to know

How company directors can be disqualified under the Company Directors Disqualification Act 1986, the grounds for disqualification (sections 2-10), disqualification periods from 2 to 15 years, and the serious consequences of acting while disqualified.

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