What is a company appointment?
A company appointment is the formal process of assigning someone to an office within a company. The people appointed to these offices are known as company officers or simply officers. All appointments involve legal filing requirements to update the public record at Companies House.
What is a company director?
A company director is an officer responsible for running the day-to-day operations of a company. Directors manage the business on behalf of the shareholders (ie the owners) and ensure the company meets its legal, reporting, and financial obligations.
Under the Companies Act 2006, every private limited company (LTD) must appoint at least one director who is a natural person (ie a human individual, rather than another company). Every public limited company (PLC) must appoint at least two directors.
Directors make key strategic and operational decisions, such as:
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approving major contracts and loans
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determining company policy and strategy
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managing financial accounts and regulatory filing
For more information on the wide range of responsibilities that come with this role, read The role of a company director and Directors’ duties. You should also be aware that there are various types of directors. For more information, read Different types of company director.
Requirements for a director
To be appointed as a director in the UK, an individual must:
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be at least 16 years old
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not be disqualified from acting as director (ie barred by a court order or other legal restriction), and
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not be an undischarged bankrupt (unless granted specific court permission)
Additionally, under the Economic Crime and Corporate Transparency Act 2023, every director is required to complete identity verification directly with Companies House as part of their appointment process. For more information on the verification process, read Important Companies House filings.
For more information on the steps required to make a director appointment, read Appointing and removing directors.
Is a director an employee?
When directors are appointed, they become office holders. An office holder is an individual appointed to a position by a company, but isn't automatically under a contract of employment or similar, and does not receive regular payments.
Directors don't automatically have employee status and, consequently, the employment rights associated with being an employee (eg a director appointed under a Non-executive director letter of appointment is not considered an employee). A director may only be considered an employee if they work under a genuine contract of employment (eg under a Senior employment contract).
To learn more about office holders, read Consultants, workers, and employees.
What is a company secretary?
A company secretary is an officer appointed to handle the essential administration and statutory duties for the company. This means the secretary provides administrative and governance support to a company’s leadership, ensuring the company is compliant with relevant laws and regulations.
Company secretaries are office holders, although they may also become employees if they have a contract of employment. Crucially, as officers of the company, they are also personally liable for certain company defaults. For example, failure to file certain statutory information can result in a personal company secretary being fined.
All PLCs must have a company secretary. LTDs do not need to have a company secretary, unless their articles of association require it.
A company secretary can be a person or a business (eg another company).
Company secretary responsibilities
There aren’t specific legal duties for company secretaries; generally, the role and duties are outlined in an employment contract or service agreement. Because of this, a company’s management should carefully consider what support they will need from the secretary they appoint. A company secretary’s responsibilities often include:
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organising board, committee, and shareholder meetings
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taking and maintaining Meeting minutes
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preparing annual company reports and accounts
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distributing meeting notices, agendas, minutes, resolutions, and other relevant documents
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ensuring company policies are up-to-date and compliant with the law
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providing administrative and governance support to directors
Company secretaries of public companies play a crucial role in the governance of the company. Their duties are guided by the UK Corporate Governance Code.
Appointment of company secretaries
A company can appoint as many company secretaries as it likes. However, the minimum requirements differ based on the type of company.
For a private company secretary, the law doesn't require any specific qualifications, and the role can even be fulfilled by a director. However, there are restrictions on who can be appointed, including prohibitions on appointing:
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the company’s auditor
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anyone who has declared bankruptcy and not paid their debts
Company secretaries of public companies must have specific qualifications and possess the necessary knowledge and experience to perform their duties effectively. For more information, Ask a lawyer.
Once a company secretary is appointed, you must notify Companies House immediately by filing the relevant form. The company secretary must also verify their identity, as this is mandatory for anyone who files documents for a company with Companies House. For more information, read Important Companies House filings.
What is a shareholder?
A shareholder (also known as a ‘member’) is an individual or organisation that legally owns one or more shares in a company. Shareholders are the owners of the company, distinct from the directors who manage it.
Shareholders aren’t employees of the company, nor do they run the company’s day-to-day operations. Instead, they collectively determine the direction of the business by voting on specific matters, and will step in to resolve matters of specific importance relating to the company’s constitution or activities. A shareholder’s main aim is to profit from their investment in the company.
Every LTD must have at least one shareholder, and one person can hold all the shares and be the sole director. The first shareholders of a company, ie those who set up the company, are known as ‘subscribers’. The number of shares held determines a shareholder’s level of ownership and their voting power.
Shareholder rights
The specific rights of each shareholder depend on the class of shares they hold. The most common type of shares is ordinary shares, which provide members with basic rights to:
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vote on company decisions (eg changing the company's name or structure, amending the articles, or removing a director)
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receive dividends
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receive a copy of the company's annual accounts
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receive a portion of the company’s assets if it is closed
If a company has multiple shareholders, they can agree to further define and restrict these rights, manage ownership disputes, and clarify operational issues by using a Shareholders’ agreement.
How do you become a shareholder?
An individual or company can become a shareholder in one of two main ways. The method dictates the process the company must follow to make the appointment official:
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on formation (subscription) - the first shareholders are formally listed when the company is initially registered with Companies House. These are the people who agree to take the very first shares issued by the company. For more details on what happens after this, read What happens after you register your company?
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later acquisition or shares (ie a transfer or issue) - shares can be acquired after the company is incorporated, either by receiving a transfer of existing shares from a current owner (this typically involves a Stock transfer form) or by the company issuing new shares. Once someone acquires shares, the company issues them a Share certificate as proof of ownership. For more information on this process, read Share transfers and issuing new shares
What is a PSC?
For the purposes of this section, the term ‘company’ also applies to limited liability partnerships (LLPs) and Scottish limited partnerships, which both have PSCs.
A person with significant control (PSC) is an individual (or other legal entity, like a company) who owns or controls a company. They don't have to be a director or employee; their status is determined by their influence over the company's decisions.
A PSC is typically someone who:
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holds more than 25% of the shares in the company
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has control of more than 25% of the voting rights in the company
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has the right to appoint or remove the majority of the board of directors
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has the right to exercise significant control over the company, and/or
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has significant control over a trust or firm that meets at least one of the above conditions
Companies must declare anyone who meets at least one of the above conditions on their PSC register.
What is a PSC register?
A company’s PSC register is where the company records current information about the individuals who ultimately own or control the business. This information is publicly available and held directly by Companies House.
For each PSC, the company must collect and file the following details:
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name and date of birth
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nationality and country of residence
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correspondence and home address (the latter is not made public)
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date when they became a PSC and when they confirmed their details
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nature of control over the company (eg holding between 25% and 50% of shares, between 50% and 75% of shares, or 75% of shares or more)
Once a PSC is identified, the company must notify Companies House immediately. Additionally, every PSC must complete identity verification with Companies House as part of their appointment process. For more information on the notification and verification process, read Important Companies House filings.
What is an auditor?
A company auditor is an individual or organisation that is registered with a professional accountancy body and is responsible for reporting on a company’s annual accounts. An auditor must be appointed for each financial year, unless the company is exempt from requiring an audit. Most small LTDs are exempt from needing an auditor.
The information below is primarily relevant to LTDs. Rules for public limited companies are stricter and differ significantly; Ask a lawyer to learn more.
What does an auditor do?
An auditor's function is to report on the company's annual accounts and other statutory financial information, such as the directors' report and strategic report (if one is prepared). To do this, they carry out investigations to ensure:
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the company has kept adequate accounting records
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the individual accounts and the directors' report are in agreement with those accounting records
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they receive all the necessary information and explanations for their audit
The auditor must sign and date their reports. If the auditor is an accountancy or audit firm, the senior statutory auditor must sign on behalf of the firm.
Auditor rights
To perform their duties effectively, auditors have several legal rights, including:
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access to information - they've the right of full access to the company’s books, accounts, and vouchers (ie documents supporting invoices) and can require officers or employees to provide necessary information and explanations
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general meetings - they're entitled to receive notices of, attend, and speak at any general meeting on business that concerns them as an auditor
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removal - only the company’s members may remove an auditor by passing an ordinary resolution at a general meeting, provided they give special notice of their intention to do so
Appointing auditors
An auditor must be independent from the company they are auditing. This means that an auditor cannot be:
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an officer or employee of the company
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an officer or employee of any associated undertaking of the company (ie a subsidiary company or a closely related business entity)
Companies must appoint an auditor for each financial period before the end of a 28-day period following the deadline for sending out the previous year's accounts. The appointment process generally involves:
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an initial appointment of the company's first auditor by the directors
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subsequent appointments made by the members, the directors, or the Secretary of State
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the automatic re-appointment of a previous auditor if no new auditor is appointed
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the removal of an auditor by the company’s members
Ask a lawyer to learn more about how to appoint or remove an auditor.
Maintaining accurate company appointments and registers is critical. Remember to file all changes with Companies House promptly. For full details on forms and deadlines, read Important Companies House filings.
If you have complex corporate governance or reporting requirements, or have any questions, do not hesitate to Ask a lawyer. For more information on the types of business entities you can establish, read Choosing your business structure. Remember that, as a Rocket Legal+ member, you can register your company for free with our Business registration service.
