Corporate Directors in the United Kingdom
59 William and Mary Law Review Online 65 (2018)
25 Pages Posted: 20 Mar 2017 Last revised: 4 Jun 2018
Date Written: March 17, 2017
In the United States, state corporation law uniformly provides that only natural persons may serve as directors of corporations. Corporations, limited liability companies, and other entities otherwise recognized in the law as legal persons are prohibited from so serving. In contrast, the United Kingdom allowed legal entities to serve as directors of a company. In 2015, however, legislation came into force adopting a general prohibition of these so-called corporate directors, albeit while contemplating some exemptions. This article argues that there are legitimate reasons companies may wish to appoint corporate directors. It also argues that the transparency and accountability concerns that motivated the legislation are overstated. The requisite enhancement of transparency and accountability can be achieved without a sweeping ban. Accordingly, this article proposes that Parliament either repeal the ban or, at least, authorize liberal exemptions.
Keywords: board of directors, directors, corporate directors, United Kingdom, natural persons, legal persons
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