A UK company can appoint another company as a director. This appointee is known a corporate director: a company, or another body corporate with its own legal personality, appointed to sit on the board of a UK company and act as a director in its own corporate name. That compares with an individual being appointed personally.
A February 2022 impact assessment estimated that around 31,200 UK companies have corporate directors appointed to their boards.
The corporate director still has to act through one or more human beings in practice: an authorised individual, typically a director or secretary of the corporate director, is nominated to sign documents and attend meetings on its behalf. That individual does not, however, personally become a director of the company the corporate director serves.
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A restriction on new corporate directors has been written into law since 2015 but never switched on. In another article, we look at the planned restrictions on corporate directors, but in this guide we cover what a corporate director is, the rules that currently apply, how to appoint one and the ways in which corporate directors can legitimately be used.
Who can be appointed as a corporate director of a UK company?
Currently, there are few restrictions on corporate directors of UK companies.
Section 155 of the Companies Act 2006 requires that a company always has at least one director who is a natural person – so a board must always include at least one individual person. A company formation request that only names a corporate director will be rejected by Companies House, and any company that finds itself with only corporate directors – perhaps because the individual directors have resigned or died – will face enforcement action.
Provided that minimum condition is satisfied, there is no current restriction on how many additional corporate directors a company can appoint. There is also no restriction on where the corporate director is incorporated. Currently, a corporate director can be a UK-based corporate body or an equivalent entity registered elsewhere in the world.
The vast majority of UK-based corporate directors are themselves companies. However, another form of UK body corporate with legal personality can act as a corporate director, including limited liability partnerships (LLPs), Charitable Incorporated Organisations (CIOs) and Registered Societies. General partnerships and trusts, which don’t have separate legal personality of their own, cannot be appointed as a director in either an individual or corporate capacity.
Corporate director vs nominee director vs shadow director
We should distinguish between the features of a corporate director, nominee director and shadow director:
- A corporate director is a company formally appointed to a board, and which appears on the public register as a director in its own name.
- A nominee director is someone formally appointed to a board who, by arrangement, acts on another party’s instructions rather than exercising fully independent judgment. A nominee director is still personally named on the register and personally holds the legal duties and liabilities of a director.
- A shadow director is a person – an individual or, in principle, a corporate entity – who is not formally appointed as a director at all, but whose directions or instructions the properly appointed directors are accustomed to act on. Despite never appearing on the register as a director, a shadow director can be treated as one for the purposes of director duties and liability.
A corporate director can, in principle, overlap with either of the other two classes. The individuals controlling a corporate director’s decisions could separately be found to be acting as shadow directors of the company it serves, depending on their conduct.
How to appoint a corporate director
A corporate director can be appointed at incorporation of a company. In that case, their details are included on the company formation application (form IN01). At least one individual natural person must be appointed as a director at the same time.
At any time following incorporation, the appointment of a new corporate director must be notified to Companies House within 14 days. This is done via form AP02 – Appointment of corporate director (not the form AP01 used for individual directors). The AP02 form can be submitted electronically using a service such as Inform Direct, via Companies House’s WebFiling platform, or by sending a copy of the paper form.
At present, the new appointment of a corporate director to a company does not require any form of identity verification or for any Companies House personal code to be provided in relation to the appointment. This will change in due course. Furthermore, under the changes introduced on 18 November 2025, UK companies being appointed as corporate directors already need to verify the identity of their own individual directors and persons with significant control.
Practically, the company will need to undertake a process ahead of the appointment being notified to Companies House. They would need to reach commercial terms with the corporate director. A clear legal agreement should be put in place, documenting the two parties’ rights, responsibilities and remedies. The company should pass a board resolution. They would also seek a signed letter of consent from an authorised individual at the corporate director.
Review our guide to the appointment of directors for other items to consider when appointing new officers.
What information must be provided on the Companies House AP02 form?
The information that must be provided to Companies House on the AP02 form includes:
- The date of the corporate director’s appointment
- Confirmation that the corporate director has supplied consent to act in that role
- The name of the corporate director
- The corporate director’s registered office address or principal address
- For directors registered in the UK, their company registration number
- For directors not registered in the UK:
- The legal form of the corporate body
- The law under which it is governed
- The country in which the company is registered (as applicable)
- The company’s registration number in that country (as applicable)
When must details of a corporate director on the public register be updated?
If any of the particulars notified to Companies House for a corporate director change, form CH02 (‘Change the details of a corporate director’) must be submitted. This would cover, for example, if the corporate director changes its name or legal form.
When a corporate director is terminated, form TM01 must be submitted to Companies House.
Just as with appointments, all corporate director changes and terminations must be reported to Companies House within 14 days.
What are the duties and liability of a corporate director?
A corporate director owes exactly the same statutory duties as an individual director, including the seven duties codified in sections 171 to 177 of the Companies Act 2006.
The Holland v Revenue and Customs & Another (2010) UKSC 51 case addressed key questions of liability in instances in which corporate directors act. The Court held that the individual directors of a corporate director were not personally liable to the company the corporate director served, for that corporate director’s own actions – provided those individuals had acted properly in relation to the corporate director’s own affairs.
That protection for individuals is not absolute. Any person who goes beyond managing the corporate director properly, and instead directly controls or gives instructions to the underlying company, risks being treated as a de facto or shadow director of that company in their own right, with potential personal liability following from that status.
Legitimate uses of corporate directors
Corporate directors are often seen in the following scenarios:
- In group structures, where a holding company sits on the board of each subsidiary
- In company formation, where a formation agent may use a corporate director to hold a company’s board seat until the business is transferred to a new owner, at which point the corporate director resigns
- When corporate providers offer a commercial service to their clients as an expert corporate director
What are the advantages of using a corporate director?
There are a number of advantages that the use of a corporate director can provide:
| Factor | Detail |
|---|---|
| Credibility | An established corporate entity as a director can lend credibility to a new or smaller business, providing comfort as to governance standards. |
| Continuity | A well-resourced corporate officer, with appropriate policies and procedures in place, can survive the resignation, retirement or death of any one individual, providing continuity of approach |
| Centralised group governance | A holding company can sit on the board of each subsidiary, keeping control and decision-making consistent across a group without naming multiple individuals on every board. |
| Liability ring-fencing | Liability for the corporate director's actions as director sits with that corporate entity in the first instance, rather than defaulting to the individuals who act for it (see Holland v HMRC, above). |
| Reduced filing churn | Changes of personnel within the corporate director don't currently always require a Companies House filing by the appointing company. |
What are the perceived disadvantages of a corporate director?
The following disadvantages are usually cited by those sceptical of the use of corporate directors:
| Factor | Detail |
|---|---|
| Reduced transparency | The public register shows the corporate entity's name, but not the individuals actually making decisions. That is particularly challenging when the corporate director isn’t a UK entity, especially it is based in a jurisdiction in which it is difficult to ‘see through’ to the underlying individuals who act. |
| Potential for misuse | A corporate director can be used, especially where it is registered offshore, to obscure who really controls a company. That can raise reputational and governance questions of the company making the appointment. |
| Cost | Engaging a professional corporate director service can be expensive. For most companies, an accountant can provide strong support to directors alongside other core services. It may be appropriate to consult a solicitor in more complex cases, likely even if a corporate director is appointed. |
| Added complexity | With legal agreements to put in place with the corporate director, an extra layer of control, filings and (eventually) identity verification requirements adds to complexity and potential administration. |
| Regulatory uncertainty | Some form of ban is coming, with no fixed date. Companies relying on corporate directors need to plan for change without knowing exactly when it will land or the exact, final form it will take. |
The case for reform: why a partial ban on corporate directors is coming
Corporate directors are appointed by only a small minority of UK companies, but feature disproportionately in patterns linked to financial crime. The concern extends to transparency, which drives the reform agenda under the Economic Crime and Corporate Transparency Act (ECCTA).
The concern is straightforward: a corporate director, especially one incorporated offshore, can make it very difficult to identify the real individual behind a company’s decisions. The register shows the corporate entity’s name, not a person, and tracing the corporate director’s own directors and shareholders can be genuinely difficult across jurisdictions.
What will the corporate director ban actually change?
The Small Business, Enterprise and Employment Act 2015 inserted new sections into the Companies Act 2006 to prohibit corporate directors, and ECCTA included a further mechanism to finally activate a restriction.
The law provides the basis for exceptions to the ban, which are still to be confirmed in regulations.
In a separate article, we look in detail at what we know about a potential ban on corporate directors, what’s still to be decided and how companies and their professional advisers can prepare.
As yet, there is no announced commencement date for a ban.
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