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Types of directors (Alternate director (The CA2006 model articles for…
Types of directors
Alternate director
An individual appointed by a director to act on their behalf at directors' meetings or for (a) particular task(s)
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An alternate director is appointed by a director to act on behalf of the director generally in the absence of that director
The appointment is usually confirmed or noted at a directors' meeting and their details should be entered in the register of directors as the company law will perceive them as being a liable as any other director
The appointing director may also revoke the alternate's appointment at any time by notice to the company
Where the appointing director ceases to hold office, for whatever reason, any alternate director so appointed will automatically cease to hold office
An altenalte director is generally entitled to receive notice of all board meetings and care should be taken to ensure that the alternate director receives all the necessary information to keep them up to date with what is going on in the company on a day-to-day basis and that a general power is delegated to them
The use of alternate directors was once very popular in offshore jurisdictions, however in recent years it has become far less common to use them. The reasoner the decline is partly due to the increased use of corporate director which make it far easier to ensure that a quorate meeting can be held at all times.
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The model articles created under CA2006 for private companies do not contain provisions for alternate directors
The CA2006 model articles for public companies provide that an alternate director has the same rights in relation to any directors' meeting or directors' written resolution, as the alternates appointer. Except as the articles otherwise specify, alternate directors are:
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Corporate directors
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A company is a separate legal entity or 'person' and it is therefore possible for a company to be appointed as a director of another company
All UK companies must have at least one director who is a natural person, to ensure that there is an individual who can be held accountable for the actions of the company
A potential risk is that if a director of the corporate director regularly attends board meetings they could be held to be a de facto director of the company on whose board the corporate director sits
Offshore service providers are usually appointed as directors for a number of client owned entities. Individuals may be appointed to act as director or alternatively a company owned by the CSP may be appointed in some offshore jurisdictions