Appointment

Status as Director

The questions of whether or not a person stands appointed as a director or whether he has ceased to be a director are determined by ordinary principles of company law and contract law. The appointment of a director is effected by the members or in some cases, by the board of directors.

The director must consent to his appointment as such. The appointment to the office may be governed by a contract. He may be appointed or may already be an employee or independent contractor with the company.

Registration of the appointment ith the Companies Registration Office is independent of the appointment as director. The company’s obligation to register the appointment of a director with the CRO is a separate compliance obligation. It does not by itself cause a change in status.


Basic Qualifications to act as a Director

The first directors are those persons determined in writing by the subscribers to the constitution or a majority of them. After that, the directors are usually appointed by the shareholders. The former requirement for the rotation of directors is not applicable under the Act’s default provisions.

Directors must be natural persons (individuals) and must be over 18 years of age.  A person under 18 years’ old may not be appointed a director and the appointment is of no effect.  Persons under age who stood appointed directors prior to the commencement of the 2014 Act, ceased to be directors on its commencement.

A company must have at least one director. It is an offence for a company not to have a director.  Default by a company and any officer in default in relation to this obligation for more than 28 days consecutively, is a category 3 offence.


Single Director now Suffices

A limited company need only have one director, since the commencement of the Companies Act 2014. Where a company has a single director, it is deemed to be a single director company, even if its constitution provides for two directors.

In the case of a single-member company, the sole member may appoint a person to be a director of the company by serving a notice in writing on the company which states that the named person is appointed as a director.

The requirement for a single director reflects the commercial and practical reality of many smaller enterprises.  The prior requirement for two directors commonly led to nominee family members with no involvement in the business, being appointed as a second director.

The case law consistently held that such directors owed much the same duties as active directors and might be subject to restrictions, sanction and civil liability for failure in the performance of their duties.


Power to Appoint Director

The first directors of a company are those persons determined in writing by the subscribers to the constitution or a majority of them. Unless the company’s constitution provides otherwise, the subsequent directors of the company are appointed by the members in general meeting.

The directors of the company may from time to time appoint any person to be a director of the company, either to fill a casual vacancy or as an additional director. The total number of directors of the company shall not at any time exceed the number if any, provided for in its constitution. Any director so appointed shall hold office only until the following annual general meeting, and shall then be eligible for re-election. The diretors are commonly given more extensive power to appoint directors.

The company may, by ordinary resolution, appoint another person in place of a director removed from office. Without prejudice to the powers of the directors to appoint an additional director or fill a casual vacancy, the company in general meeting may appoint any person to be a director, either to fill a casual vacancy or as an additional director.

The company may from time to time, by ordinary resolution, increase or reduce the number of directors.


Procedural Requirments

No person other than a retiring director shall, save where recommended by the directors, be eligible for election as a director at any general meeting unless the following nomination requirements have been completed. Not less than 3 nor more than 21 days before the day appointed for the meeting, there shall have been left at the company’s registered office

  • a notice in writing signed by a member of the company duly qualified to attend and vote at the meeting for which such notice is given, of his or her intention to propose the person concerned for such election; and
  • a notice in writing signed by the person concerned of his or her willingness to be so elected and that any eligibility requirements for that purpose have been complied with.

At a general meeting of a company, a motion for the appointment of 2 or more persons as directors of the company by a single resolution shall not be made, unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it. A resolution moved in contravention of this requirement shall be void, whether or not it’s being so moved was objected to at the time.

Where a resolution moved in contravention of this requirement is passed, no provision for the automatic reappointment of retiring directors in default of another appointment shall apply.

A motion for approving a person’s appointment or for nominating a person for appointment shall be treated as a motion for his or her appointment.


Registration of appointment as Director with CRO I

A company must within the period of 14 days after the date of the happening of

  • any change in its directors or in its secretary or assistant or deputy secretary; or
  • any change in any of the particulars contained in the register,

send to the CRO a notification in the prescribed form of the change and of the date on which it occurred. There is a prescribed form; the B10.

If the company refuses to file the return at the director’s request, the director may file the notice directly.


Registration of Appointment as Director with CRO II

Where the company fails to return a notification to the CRO, the person ceasing to be a director or secretary may serve a notice on the company requiring it to make the requisite notification.  If the company fails to do so within 21 days, he may forward to the CRO and every person to his knowledge who is an officer of the company, a copy of his notice or proof of resignation.

He must also furnish with the notice or proof, additional information as may be prescribed. This includes a declaration setting out the persons who are officers of the company and copies of the written request of other persons above, that they take steps to remedy the failure.  The information required is deemed not to be defamatory in itself.

If all persons resign as directors of the company, it may be struck off, if the CRO believes that it is not carrying out business.

The Minister may make regulations providing that the requirement that the usual residential address of an officer of a company appears on the register kept by the CRO, shall not apply in relation to a particular person who is such an officer. This may be permitted in accordance with a procedure provided in the regulations if it is determined

  • that the circumstances concerning the personal safety or security of the person warrant the application of the foregoing exemption; and
  • such other conditions (if any) as are specified in the regulations for the application of the foregoing exemption are satsfied.

CRO Notification and Consent

A notification sent to the CRO of the appointment of a person as a director, secretary, joint secretary or assistant or deputy secretary of a company shall be accompanied by a consent signed by that person to act as director or secretary or assistant or deputy secretary or, where all the partners in a firm have been appointed joint secretaries of a company, by one partner on behalf of the firm, as the case may be.

Where a person is usually known by a title different from his surname, his surname for the above purpose includes that title, A “former forename” or “surname” does not include

  • in the case of a person usually known by a title different from his or her surname, the name by which he or she was known previous to the adoption of or succession to the title; or
  • in the case of any person, a former forename or surname where that name or surname was changed or disused before the person bearing the name attained the age of 18 years or has been changed or disused for a period of not less than 20 years, or
  • in the case of a married person or civil partner, the name or surname by which he or she was known previously to his or her marriage or civil partnership.

In the case of a person who is a director of more than one company, the person may send a notification in the prescribed form to the CRO of a change in his or her usual residential address or of a change in his or her name and (in each case) of the date on which the change occurred.

If such a notification is sent to the CRO and the relevant companies are listed in the notification as being companies of which the person is a director each of the relevant companies shall be relieved, as respects, as respects that particular change or changes, of the obligation to send a notification of it or them to the CRO.


References and Sources

Primary References

 

Companies Act 2014 (Irish Statute Book)

Companies Act 2014: An Annotation (2015) Conroy

Law of Companies 4th Ed.  (2016)  Ch.13   Courtney

Keane on Company Law 5th Ed. (2016) Ch. 27 Hutchinson

Other Irish Sources

Tables of Origins & Destinations Companies Act 2014 (2016) Bloomsbury

Introduction to Irish Company Law    4th Ed. (2015) Callanan

Bloomsbury’s Guide to the Companies Act 2015      Courtney & Ors

Company Law in Ireland 2nd Ed. (2015) Thuillier

Pre-2014 Legislation Editions

Modern Irish Company Law   2nd Ed. (2001) Ellis

Cases & Materials Company Law 2nd Ed. (1998) Forde

Company Law 4th Ed. (2008)  Forde & Kennedy

Corporations & Partnerships in Ireland (2010) Lynch-Fannon & Cuddihy

Companies Acts 1963-2012   (2012)  MacCann & Courtney

Constitutional Rights of Companies   (2007)  O’Neill

Court Applications Under the Companies Act (2013) Samad

Shorter Guides

Company Law – Nutshell 3rd Ed. (2013) McConville

Questions & Answers on Company Law (2008)        McGrath, N & Murphy

Make That Grade Irish Company Law 5th Ed. (2015) Murphy

Company Law BELR Series (2015)   O’Mahony

UK Sources

Companies Act 2006 (UK) (Legilsation.gov.uk)

Statute books Blackstone’s statutes on company law (OUP)

Gower Principles of Modern Company Law 10th Ed. (2016) P. and S. Worthington

Company Law in Context 2nd Ed. (2012) D Kershaw

Company Law (9th Ed.) OUP (2016) J Lowry and A Dignam

Cases and Materials in Company law 11th Ed (2016) Sealy and Worthington

 

UK Practitioners Services

Tolley’s Company Law Handbook

Palmer’s Company Law