Corporate directors

87 Requirement for all company directors to be natural persons

(1) The Companies Act 2006 is amended as follows.

(2) Omit section 155 (companies required to have at least one director who is a
5natural person).

(3) In section 156 (direction requiring company to make appointment)—

(a) in subsection (1), for “section 155” substitute “provision by virtue of
section 156B(4)”;

(b) in subsection (4), for “of section 154 or 155” substitute “as mentioned in
10subsection (1)”.

(4) Before section 157 (and after the preceding cross-heading) insert—

“156A Each director to be a natural person

(1) A person may not be appointed a director of a company unless the
person is a natural person.

(2) 15Subsection (1) does not prohibit the holding of the office of director by
a natural person as a corporation sole or otherwise by virtue of an
office.

(3) An appointment made in contravention of this section is void.

(4) Nothing in this section affects any liability of a person under any
20provision of the Companies Acts or any other enactment if the person—

(a) purports to act as director, or

(b) acts as shadow director,

although the person could not, by virtue of this section, be validly
appointed as a director.

(5) 25This section has effect subject to section 156B (power to provide for
exceptions from requirement that each director be a natural person).

(6) If a purported appointment is made in contravention of this section an
offence is committed by—

(a) the company purporting to make the appointment,

(b) 30where the purported appointment is of a body corporate or a
firm that is a legal person under the law by which it is governed,
that body corporate or firm, and

(c) every officer of a person falling within paragraph (a) or (b) who
is in default.

35For this purpose a shadow director is treated as an officer of a company.

(7) A person guilty of an offence under this section is liable on summary
conviction—

(a) in England and Wales, to a fine;

(b) in Scotland or Northern Ireland, to a fine not exceeding level 5
40on the standard scale.

156B Power to provide for exceptions from requirement that each director
be a natural person

(1) The Secretary of State may make provision by regulations for cases in
which a person who is not a natural person may be appointed a director
5of a company.

(2) The regulations must specify the circumstances in which, and any
conditions subject to which, the appointment may be made.

(3) Provision made by virtue of subsection (2) may in particular include
provision that an appointment may be made only with the approval of
10a regulatory body specified in the regulations.

(4) The regulations must include provision that a company must have at
least one director who is a natural person (and for this purpose the
requirement is met if the office of director is held by a natural person as
a corporation sole or otherwise by virtue of an office).

(5) 15Regulations under this section may amend section 164 so as to require
particulars relating to exceptions to be contained in a company’s
register of directors.

(6) The regulations may make different provision for different parts of the
United Kingdom.

20This is without prejudice to the general power to make different
provision for different cases.

(7) Regulations under this section are subject to negative resolution
procedure.

156C Existing director who is not a natural person

(1) 25In this section “the relevant day” is the day after the end of the period
of 12 months beginning with the day on which section 156A comes into
force.

(2) Where—

(a) a person appointed a director of a company before section 156A
30comes into force is not a natural person, and

(b) the case is not one excepted from that section by regulations
under section 156B,

that person ceases to be a director on the relevant day.

(3) The company must—

(a) 35make the necessary consequential alteration in its register of
directors, and

(b) give notice to the registrar of the change in accordance with
section 167.

(4) If an election is in force under section 167A in respect of the company,
40the company must, in place of doing the things required by subsection
(3), deliver to the registrar in accordance with section 167D the
information of which the company would otherwise have been obliged
to give notice under subsection (3).

(5) If it appears to the registrar that—

(a) a notice should have, but has not, been given in accordance with
subsection (3)(b), or

(b) information should have, but has not, been delivered in
accordance with subsection (4),

5the registrar must place a note in the register recording the fact.”

88 Review of section 87

(1) The Secretary of State must, before the end of each review period—

(a) carry out a review of section 87, and

(b) prepare and publish a report setting out the conclusions of the review.

(2) 10The report must in particular—

(a) set out the objectives intended to be achieved by the section,

(b) assess the extent to which those objectives have been achieved, and

(c) assess whether those objectives remain appropriate and, if so, the
extent to which they could be achieved in another way which imposed
15less regulation.

(3) The Secretary of State must lay the report before Parliament.

(4) Each of the following is a review period for the purposes of this section—

(a) the period of 5 years beginning with the day on which section 87 comes
into force (whether wholly or partly), and

(b) 20each successive period of 5 years.

Shadow directors

89 Application of directors’ general duties to shadow directors

(1) In section 170 of the Companies Act 2006 (scope and nature of general duties
of directors) for subsection (5) substitute—

“(5) 25The general duties apply to a shadow director of a company where and
to the extent that they are capable of so applying.”

(2) The Secretary of State may by regulations make provision about the
application of the general duties of directors to shadow directors.

(3) The regulations may, in particular, make provision—

(a) 30for prescribed general duties of directors to apply to shadow directors
with such adaptations as may be prescribed;

(b) for prescribed general duties of directors not to apply to shadow
directors.

(4) In this section—

• 35“director” and “shadow director” have the same meanings as in the
  Companies Act 2006;

• “general duties of directors” means the duties specified in sections 171 to
  177 of that Act;

• “prescribed” means prescribed in regulations.

(5) 40Regulations under this section are subject to affirmative resolution procedure.

90 Shadow directors: definition

(1) In section 251 of the Insolvency Act 1986 (expressions used generally), in the
definition of “shadow director”, for the words from “(but” to the end substitute
“, but so that a person is not deemed a shadow director by reason only that the
5directors act—

(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 (within the meaning given by section 1293 of the Companies
10Act 2006);

(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)”.

(2) In section 22(5) of the Company Directors Disqualification Act 1986 (definition
15of “shadow director”) for the words from “(but” to the end substitute “, but so
that a person is not deemed a shadow director by reason only that the directors
act—

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

(b) in accordance with instructions, a direction, guidance or advice given
20by 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)”.

(3) 25In section 251(2) of the Companies Act 2006 (definition of “shadow director”)
for the words “on advice given by him in a professional capacity” substitute “—

(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
30or 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)”.

(4) In section 1293 of the Companies Act 2006 (meaning of “enactment”) after
35paragraph (a) insert—

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

91 Shadow directors: provision for Northern Ireland

(1) In Article 5(1) of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405S.I. 1989/2405
40(N.I. 19)) (interpretation), in the definition of “shadow director”, for the words
from “(but” to the end substitute “, but so that a person is not deemed a shadow
director by reason only that the directors act—

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

(b) in accordance with instructions, a direction, guidance or advice given
45by that person in the exercise of a function conferred by or under a
statutory provision;

(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)”.

(2) In Article 2(2) of the Company Directors Disqualification (Northern Ireland)
5Order 2002 (S.I. 2002/3150 (N.I. 4)S.I. 2002/3150 (N.I. 4)) (interpretation), in the definition of
“shadow director”, for the words from “(but” to the end substitute “, but so that
a person is not deemed a shadow director by reason only that the directors
act—

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

(b) 10in accordance with instructions, a direction, guidance or advice given
by that person in the exercise of a function conferred by or under a
statutory provision;

(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
15Ministers of the Crown Act 1975)”.

Part 8 Company filing requirements

Annual return reform

92 Duty to deliver confirmation statement instead of annual return

20For Part 24 of the Companies Act 2006 (annual return) substitute—

“ Part 24 Annual confirmation of accuracy of information on register

853A Duty to deliver confirmation statements

(1) Every company must, before the end of the period of 14 days after the
25end of each review period, deliver to the registrar—

(a) such information as is necessary to ensure that the company is
able to make the statement referred to in paragraph (b), and

(b) a statement (a “confirmation statement”) confirming that all
information required to be delivered by the company to the
30registrar in relation to the confirmation period concerned under
any duty mentioned in subsection (2) either—

(i) has been delivered, or

(ii) is being delivered at the same time as the confirmation
statement.

(2) 35The duties are—

(a) any duty to notify a relevant event (see section 853B);

(b) any duty under sections 853C to 853I.

(3) In this Part “confirmation period”—

(a) in relation to a company’s first confirmation statement, means
40the period beginning with the day of the company’s
incorporation and ending with the date specified in the
statement (“the confirmation date”);

(b) in relation to any other confirmation statement of a company,
means the period beginning with the day after the confirmation
date of the last such statement and ending with the
confirmation date of the confirmation statement concerned.

(4) 5The confirmation date of a confirmation statement must be no later
than the last day of the review period concerned.

(5) For the purposes of this Part, each of the following is a review period—

(a) the period of 12 months beginning with the day of the
company’s incorporation;

(b) 10each period of 12 months beginning with the day after the end
of the previous review period.

(6) But where a company delivers a confirmation statement with a
confirmation date which is earlier than the last day of the review period
concerned, the next review period is the period of 12 months beginning
15with the day after the confirmation date.

(7) For the purpose of making a confirmation statement, a company is
entitled to assume that any information has been properly delivered to
the registrar if it has been delivered within the period of 5 days ending
with the date on which the statement is delivered.

(8) 20But subsection (7) does not apply in a case where the company has
received notice from the registrar that such information has not been
properly delivered.

853B Duties to notify a relevant event

The following duties are duties to notify a relevant event—

(a) 25the duty to give notice of a change in the address of the
company’s registered office (see section 87);

(b) in the case of a company in respect of which an election is in
force under section 128B (election to keep membership
information on central register), the duty to deliver anything as
30mentioned in section 128E;

(c) the duty to give notice of a change as mentioned in section 167
(change in directors or in particulars required to be included in
register of directors or register of directors’ residential
addresses);

(d) 35in the case of a company in respect of which an election is in
force under section 167A (election to keep information in
register of directors or register of directors’ residential
addresses on central register), the duty to deliver anything as
mentioned in section 167D;

(e) 40in the case of a private company with a secretary or a public
company, the duty to give notice of a change as mentioned in
section 276 (change in secretary or joint secretaries or in
particulars required to be included in register of secretaries);

(f) in the case of a private company with a secretary in respect of
45which an election is in force under section 279A (election to
keep information in register of secretaries on central register),
the duty to deliver anything as mentioned in section 279D;

(g) in the case of a company in respect of which an election is in
force under section 790W (election to keep information in PSC

register on central register), the duty to deliver anything as
mentioned in section 790Z;

(h) in the case of a company which, in accordance with regulations
under section 1136, keeps any company records at a place other
5than its registered office, any duty under the regulations to give
notice of a change in the address of that place.

853C Duty to notify a change in company’s principal business activities

(1) This section applies where—

(a) a company makes a confirmation statement, and

(b) 10there has been a change in the company’s principal business
activities during the confirmation period concerned.

(2) The company must give notice to the registrar of the change at the same
time as it delivers the confirmation statement.

(3) The information as to the company’s new principal business activities
15may be given by reference to one or more categories of any prescribed
system of classifying business activities.

853D Duty to deliver statement of capital

(1) This section applies where a company having a share capital makes a
confirmation statement.

(2) 20The company must deliver a statement of capital to the registrar at the
same time as it delivers the confirmation statement.

(3) Subsection (2) does not apply if there has been no change in any of the
matters required to be dealt with by the statement of capital since the
last such statement was delivered to the registrar.

(4) 25The statement of capital must state with respect to the company’s share
capital at the confirmation date—

(a) the total number of shares of the company,

(b) the aggregate nominal value of those shares,

(c) the aggregate amount (if any) unpaid on those shares (whether
30on account of their nominal value or by way of premium), and

(d) for each class of shares—

(i) prescribed particulars of the rights attached to the
shares,

(ii) the total number of shares of that class, and

(iii) 35the aggregate nominal value of shares of that class.

853E Duty to notify trading status of shares

(1) This section applies where a company having a share capital makes a
confirmation statement.

(2) The company must deliver to the registrar a statement dealing with the
40matters mentioned in subsection (4) at the same time as it delivers the
confirmation statement.

(3) Subsection (2) does not apply if and to the extent that the last statement
delivered to the registrar under this section applies equally to the
confirmation period concerned.

(4) The matters are—

(a) whether any of the company’s shares were, at any time during
the confirmation period concerned, shares admitted to trading
on a relevant market or on any other market which is outside
5the United Kingdom, and

(b) if so, whether both of the conditions mentioned in subsection (5)
were satisfied throughout the confirmation period concerned.

(5) The conditions are that—

(a) there were shares of the company which were shares admitted
10to trading on a relevant market;

(b) the company was a DTR5 issuer.

(6) In this Part—

• “DTR5 issuer” means an issuer to which Chapter 5 of the
  Disclosure Rules and Transparency Rules sourcebook made by
  15the Financial Conduct Authority (as amended or replaced from
  time to time) applies;

• “relevant market” means any of the markets mentioned in article
  4(1) of the Financial Services and Markets Act 2000 (Prescribed
  Markets and Qualifying Investments) Order 2001.

853F 20Duty to deliver shareholder information: non-traded companies

(1) This section applies where—

(a) a non-traded company makes a confirmation statement, and

(b) there is no election in force under section 128B in respect of the
company.

(2) 25A “non-traded company” is a company none of whose shares were, at
any time during the confirmation period concerned, shares admitted to
trading on a relevant market or on any other market which is outside
the United Kingdom.

(3) The company must deliver the information falling within subsection (5)
30to the registrar at the same time as it delivers the confirmation
statement.

(4) Subsection (3) does not apply if and to the extent that the information
most recently delivered to the registrar under this section applies
equally to the confirmation period concerned.

(5) 35The information is—

(a) the name (as it appears in the company’s register of members)
of every person who was at any time during the confirmation
period a member of the company,

(b) the number of shares of each class held at the end of the
40confirmation date concerned by each person who was a
member of the company at that time,

(c) the number of shares of each class transferred during the
confirmation period concerned by or to each person who was a
member of the company at any time during that period, and

(d) 45the dates of registration of those transfers.

(6) The registrar may impose requirements about the form in which
information of the kind mentioned in subsection (5)(a) is delivered for

the purpose of enabling the entries on the register relating to any given
person to be easily found.

853G Duty to deliver shareholder information: certain traded companies

(1) This section applies where a traded company makes a confirmation
5statement.

(2) A “traded company” is a company any of whose shares were, at any
time during the confirmation period concerned, shares admitted to
trading on a relevant market or on any other market which is outside
the United Kingdom.

(3) 10But a company is not a traded company if throughout the confirmation
period concerned—

(a) there were shares of the company which were shares admitted
to trading on a relevant market, and

(b) the company was a DTR5 issuer.

(4) 15The company must deliver the information falling within subsection (6)
to the registrar at the same time as it delivers the confirmation
statement.

(5) Subsection (4) does not apply if and to the extent the information most
recently delivered to the registrar under this section applies equally to
20the confirmation period concerned.

(6) The information is—

(a) the name and address (as they appear in the company’s register
of members) of each person who, at the end of the confirmation
date concerned, held at least 5% of the issued shares of any class
25of the company, and

(b) the number of shares of each class held by each such person at
that time.

853H Duty to deliver information about exemption from Part 21A

(1) This section applies where a company—

(a) 30which is not a DTR5 issuer, and

(b) to which Part 21A does not apply (information about people
with significant control, see section 790B),

makes a confirmation statement.

(2) The company must deliver to the registrar a statement of the fact that it
35is a company to which Part 21A does not apply at the same time as it
delivers the confirmation statement.

(3) Subsection (2) does not apply if the last statement delivered to the
registrar under this section applies equally to the confirmation period
concerned.

853I 40Duty to deliver information about people with significant control

(1) This section applies where—

(a) a company to which Part 21A (information about people with
significant control) applies makes a confirmation statement,
and

(b) there is no election in force under section 790W in respect of the
company.

(2) The company must deliver the information stated in its PSC register to
the registrar at the same time as it delivers the confirmation statement.

(3) 5Subsection (2) does not apply if and to the extent that the information
most recently delivered to the registrar under this section applies
equally to the confirmation period concerned.

(4) “PSC register” has the same meaning as in Part 21A (see section 790C).

853J Power to amend duties to deliver certain information

(1) 10The Secretary of State may by regulations make provision about the
duties on a company in relation to the delivery of information falling
within section 853E(4), 853F(5), 853G(6), 853H(2) or 853I(2) (referred to
in this section as “relevant information”).

(2) The regulations may, in particular, make provision requiring relevant
15information to be delivered—

(a) on such occasions as may be prescribed;

(b) at such intervals as may be prescribed.

(3) The regulations may amend or repeal the provisions of sections 853A,
853B and 853E to 853I.

(4) 20The regulations may provide—

(a) that where a company fails to comply with any duty to deliver
relevant information an offence is committed by—

(i) the company,

(ii) every director of the company,

(iii) 25in the case of a private company with a secretary or a
public company, every secretary of the company, and

(iv) every other officer of the company who is in default;

(b) that a person guilty of such an offence is liable on summary
conviction—

(i) 30in England and Wales, to a fine and, for continued
contravention, a daily default fine not exceeding the
greater of £500 and one-tenth of level 4 on the standard
scale;

(ii) in Scotland or Northern Ireland, to a fine not exceeding
35level 5 on the standard scale and, for continued
contravention, a daily default fine not exceeding one-
tenth of level 5 on the standard scale;

(c) that, in the case of continued contravention, an offence is also
committed by every officer of the company who did not commit
40an offence under provision made under paragraph (a) in
relation to the initial contravention but who is in default in
relation to the continued contravention;

(d) that a person guilty of such an offence is liable on summary
conviction—

(i) 45in England and Wales, to a fine not exceeding the
greater of £500 and one-tenth of level 4 on the standard
scale for each day on which the contravention continues
and the person is in default;