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How many directors does a company need?

Number of Directors

The appointment of directors is governed by the Companies Act 2006 and a company’s articles of association. Under section 154 of the Companies Act 2006, a private company must have at least one director. There is no statutory limit to the number of directors a company may appoint during or after incorporation but there must always be at least one natural (human) company director (section 155(1) Companies Act 2006). The model articles interestingly do not specify any minimum number, although a company’s articles may specify a minimum number of directors. Companies with unamended Table A articles will be bound by regulation 64 which provides that, unless otherwise determined by ordinary resolution, the number of directors (other than alternate directors) shall not be less than two. In addition, where the number of directors is below the minimum number specified in the articles, prima facie the directors may not act.

There is no recommended number of directors for a private limited company. Much will depend on the size and sophistication of the business operation that is being undertaken. However, many SMEs are owner operated, meaning the sole shareholder will also be the sole director.

The process of appointing a director is the same notwithstanding the number of directors that a company has.

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