Check before appointing company directors

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.

Who cannot be a company director?

Certain people are legally prohibited from acting as company directors:

• anyone subject to a disqualification order or undertaking under the Company Directors Disqualification Act 1986
• anyone who is bankrupt and has not been discharged, or is subject to a bankruptcy restrictions order
• anyone subject to director disqualification sanctions under UK sanctions legislation
• anyone under 16 (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:

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.

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 the Insolvency Service's Individual Insolvency Register, which covers bankruptcies, individual voluntary arrangements and debt relief orders. A standard credit check will also show a bankruptcy.

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

Verify identity and age

Check a passport or driving licence to confirm the person is who they claim to be and is at least 16. Ask for their date of birth and make sure it matches the identity documents, because Companies House requires it on appointment forms. A right to work check is not required for a director as such, but you must do one if they will also be an employee.

A new director must also have verified their identity with Companies House and you must include their Companies House personal code in the appointment filing; someone who has not verified cannot be appointed.

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.

Review professional standing

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

• If you are appointing a finance director, verify their accountancy qualifications.
• For FCA-regulated firms, check the Financial Services Register for approved persons.
• Review their Companies House filing history for dissolved companies or patterns of concern.
• Speak to previous employers or co-directors for references.

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.

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
• record your findings and the reason for not appointing
• if the person has already been acting informally in a management role, stop this immediately and get legal advice
• if an existing director has become disqualified through a new order, they must resign immediately