In the Companies Acts “director” includes any person occupying the position of director, by whatever name called.
Definitions used in section 250
- the Companies Acts
(1) In this Act “the Companies Acts” means—
(a)the company law provisions of this Act,
(b)Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27) (community interest companies), and
(c)the provisions of the Companies Act 1985 (c. 6) and the Companies Consolidation (Consequential Provisions) Act 1985 (c. 9) that remain in force.
Defined in s.2(1) · see it in the full Act
Cases considering section 250 (15)
Smithton Ltd v Naggar
The court treated the inclusive definition of “director” as not resolving what conduct makes an individual a de facto director. It therefore assessed governance and assumed directorial functions objectively (see paras [18]; [31]; [33]).
Cavendish IP Solutions Limited v On And On Consultants Limited & Anor
The court used s.250’s inclusive definition to treat a person occupying the position of director as a director regardless of lawful appointment or title (see paras [55]-[63]). The court recognised the statutory exclusion for professional advice and enactment-based functions, while finding that NM’s conduct was directorial rather than merely advisory (see para [54]).
Garden House Software Limited v Timothy John Marsh & Ors
The court applied the statutory definition of director to the de facto-director issue and assessed whether the alleged directors occupied that position in substance. (see paras [336]-[364])
- Henderson and Jones Limited v David Jason Ross & Ors.
- Aston Risk Management Ltd v Lee Jones & Ors.
- Boston Trust Company Limited & Anor v Szerelmey Limited & Ors
- Olympic Council of Asia v Novans Jets LLP & Ors
- MANOLETE PARTNERS PLC v EBRAHIM DALAL & Ors
- Micheal & Ors v Phillips & Ors
- Nicholson & Anor v Ghuman & Ors, Re Octavian Security Ltd
- Smithton Ltd v Naggar
- McKillen v Misland (Cyprus) Investments Ltd & Ors
- Holland v The Commissioners for Her Majesty’s Revenue and Customs and another
- Stubbins Marketing Ltd v Stubbins Food Partnerships Ltd & Ors
- Instant Access Properties Ltd v Rosser & Ors
What each judgment says about section 250 is in the case-law panel in the full Act.
Explanatory note
467.This section restates the definition of “director” in section 741(1) of the 1985 Act.
277.This Part replaces Part 10 of the 1985 Act (enforcement of fair dealing by directors), the provisions relating to directors in Part 9 of that Act and the provisions relating to confidentiality orders in Part 25 of that Act. It also introduces a statutory statement of directors’ general duties to the company.
278.Section 250 defines a director as including any person occupying the position of director, by whatever name called. This is the same as the definition contained in section 741(1) of the 1985 Act. The Act does not attempt a more detailed definition of a director because it is important to ensure that the term is applied to anybody who exercises real power within the company, particularly in relation to decision taking. The term “director” therefore includes:
an executive director who has been properly appointed by the company;
a non-executive director who has been properly appointed by the company;
a de facto director (that is, a person who has assumed the status and functions of a company director even though he has not been properly appointed).
279.A “shadow director” is defined by section 251 as “a person in accordance with whose directions or instructions the directors of the company are accustomed to act”. The section provides that a person is not to be regarded as a shadow director by reason only that the directors act on advice given by him in a professional capacity. This definition is the same as the definition contained in section 741(2) of the 1985 Act.
280.This Part of the Act does not generally directly give powers to the directors, but, under the draft model articles of association for private companies limited by shares, the directors’ functions are:
to manage the company’s business; and
to exercise all the powers of the company.