DIRECTORS owe important duties to their company.

They may be personally liable to the company or its creditors if they breach those obligations.

Companies House keeps records of the registered directors of a company, but directors’ duties and liabilities extend to anyone who acts in the role of a director, so called de facto or shadow directors, even if they are not registered at Companies House.

lWhat are de facto directors?

People who act as a director of a company even though they have not been formally appointed or registered at Companies House. De facto directors will often be referred to as directors and will also occupy a senior management role.

lWhat are shadow directors?

People in accordance with whose instructions or directions a company’s directors are accustomed to act. It is not always easy to identify, but a shadow director may, for example, be a shareholder who makes decisions but is not represented on the board, or even a lender such as a bank which becomes involved in its customer’s business to protect it.

Businesses with de facto or shadow directors should ensure that appropriate insurance is in place.

ROBERT CAPPER Harrison Clark Rickerbys