The Government has a new approach as they have announced they are to ban corporate directors of businesses.
The Small Business, Enterprise and Employment Act 2015 has announced that from October 2015 (Section 87 of the Act), it is no longer possible for a company to be a director of anther company unless an exception applies.
Any purported appointment of a corporate director will be voice but there will be exceptions in which those companies (as previous) must have at least one director who is a natural person.
Currently UK companies are allowed to have corporate directors provided that at least one person is natural. The purpose of the ban is to increase the transparency and reduce the risk of illicit activity when companies have corporate directors, as well as addressing the concerns of poor corporate governance.
However, it is recognised that corporate directors can be useful in some situations where there is low risk of illicit activity or where high standards of corporate governance or disclosure apply. They undertook consulting on exceptions to the ban that should be included in regulations to be made under the Bill. Companies falling within an exception would still need to have one natural person as a director.
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