De facto and shadow directors

Published by a ��Ƶ Corporate expert

Practice notes

De facto and shadow directors

Published by a ��Ƶ Corporate expert

Practice notes

This Practice Note summarises the law relating to de facto and shadow directors of a company pursuant to the Companies Act 2006 (CA 2006) and common law.

Definition of 'director'

CA 2006 broadly defines a director as 'any person occupying the position of director, by whatever name called'.

Within that definition, case law has established that there are two categories of director:

•
de jure directors, being those directors that have been validly appointed in accordance with the company's articles of association and CA 2006, and
•
de facto directors

A third category of director, known as shadow directors, is defined separately in CA 2006.

Note that a person could be both a shadow director and a de facto director, eg if they assume the functions of a director as regards one part of the company's activities and gives directions to the board in relation to a different part of the company's activities.

The remainder of this Practice Note focuses on the law regarding de facto and shadow directors.

De facto directors

A de facto director

Jurisdiction(s):

United Kingdom

Key definition:

De facto definition

What does De facto mean?

A situation which exists as a matter of fact, but not as a matter of right, exists de facto.

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