Companies Act 2006, section 251

“Shadow director”

Part 10 A company's directors

(1) In the Companies Acts “shadow director”, in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act.

(2)A person is not to be regarded as a shadow director by reason only that the directors act [F204—

(a)on advice given by that person in a professional capacity;

(b)in accordance with instructions, a direction, guidance or advice given by that person in the exercise of a function conferred by or under an enactment;

(c)in accordance with guidance or advice given by that person in that person's capacity as a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975)F204]

(3)A body corporate is not to be regarded as a shadow director of any of its subsidiary companies for the purposes of—

  • Chapter 2 (general duties of directors),

  • Chapter 4 (transactions requiring members' approval), or

  • Chapter 6 (contract with sole member who is also a director),

by reason only that the directors of the subsidiary are accustomed to act in accordance with its directions or instructions.

Read section 251 in the full Act → Definitions (6) Cases (27)

Definitions used in section 251

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
company

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act

(4) In this section and that Schedule “company” includes any body corporate.

Defined in s.1159(4) · see it in the full Act
director

In the Companies Acts “director” includes any person occupying the position of director, by whatever name called.

Defined in s.250 · see it in the full Act
enactment

In this Act, unless the context otherwise requires, “enactment” includes—

(a)an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978 (c. 30),

(aa)an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales,

(b)an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament, and

(c)an enactment contained in, or in an instrument made under, Northern Ireland legislation within the meaning of the Interpretation Act 1978.

Defined in s.1293 · see it in the full Act
body corporate

“body corporate” and “corporation” include a body incorporated outside the United Kingdom, but do not include—

(a)

a corporation sole, or

(b)

a partnership that, whether or not a legal person, is not regarded as a body corporate under the law by which it is governed;

Defined in s.1173(1) · see it in the full Act
subsidiary

(1) The Secretary of State may by regulations amend the provisions of section 1159 (meaning of “subsidiary” etc) and Schedule 6 (meaning of “subsidiary” etc: supplementary provisions) so as to alter the meaning of the expressions “subsidiary”, “holding company” or “wholly-owned subsidiary”.

Defined in s.1160(1) · see it in the full Act

(1) The Secretary of State may by regulations amend the provisions of section 1159 (meaning of “subsidiary” etc) and Schedule 6 (meaning of “subsidiary” etc: supplementary provisions) so as to alter the meaning of the expressions “subsidiary”, “holding company” or “wholly-owned subsidiary”.

Defined in s.1160(1) · see it in the full Act

(1) The Secretary of State may by regulations amend the provisions of section 1159 (meaning of “subsidiary” etc) and Schedule 6 (meaning of “subsidiary” etc: supplementary provisions) so as to alter the meaning of the expressions “subsidiary”, “holding company” or “wholly-owned subsidiary”.

Defined in s.1160(1) · see it in the full Act

1 The provisions of this Part of this Schedule explain expressions used in section 1159 (meaning of “subsidiary” etc) and otherwise supplement that section.

Defined in Sch.6 para.1 · see it in the full Act

Cases considering section 251 (27)

Smithton Ltd v Naggar

[2014] EWCA Civ 939 · 10 July 2014Defines

The court applied the requirement that the directors be accustomed to act on a person’s directions or instructions. The claim failed because there was no evidence that a majority of the board did so (see paras [18]; [88]; [89]).

Cavendish IP Solutions Limited v On And On Consultants Limited & Anor

[2026] EWHC 2247 (Ch) · 28 August 2026Defines

The court applied the definition of shadow director as a person in accordance with whose directions or instructions the company’s directors are accustomed to act (see paras [54]; [61]).

Patrick Hughes v Martin Bellamy & Ors

[2026] EWHC 1871 (Ch) · 23 July 2026Defines

The court adopted the section 251 formulation of a shadow director and held that the allegation against Mr Bellamy failed because there was no prima facie evidence that SAI’s directors were accustomed to act on his directions or instructions. (see paras [155]-[159], [188])

7 more judgments, and what each says about section 251, are in the case-law panel in the full Act.

Explanatory note

468.This section restates the definition of “shadow director” in section 741(2) of the 1985 Act.

All the explanatory notes for the Act

Amendments and notes

1 notes from legislation.gov.uk

Amendments

  1. F204Words in s. 251(2) substituted (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 90(3), 164(3)(g)(iii)