Defacto Directors

With the codification of directors’ responsibilities under the Companies Act 2006, and rise of claims against them, it is important to identify if a person is a director of a company. Even if a person is not recorded at Companies House as a director, they can still be deemed to be a de facto director. The recent case of Gemma Limited (in liquidation) v Davies and Anor 2008 provides useful guidance on whether a person may be a de facto director:-

• The person must undertake functions that could only be carried out by a director;
• A person holding themselves out as a director could be important evidence on the basis they also acted as director;
• They must take part in directing the affairs of the Company on an equal footing with other directors;
• They must have assumed the status and functions of a director and exercised real influence in the corporate governance of the Company;
• In cases of uncertainty a person was entitled to the benefit of the doubt against being a director so long as the facts were not strained too far.

For further information contact Tammy Evans or Jeremy Lederman.

Please note: the contents of the Cumberland Ellis News Bulletin are designed for guidance only and is not intended to be a substitute for detailed legal advice. Consequently, whilst every care is taken to ensure that the information is accurate, we cannot accept responsibility for any liability to any person as a result of any errors or information which is found to be misleading.