Directors’ concerns: who is (and who is not) a director?

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The Companies (Jersey) Law 1991 sets out the meaning of ‘director’ in these terms: ‘director’ means a person occupying the position of director, by whatever name called.

It is a definition that is, paradoxically, both straightforward and circular and it raises issues that are difficult enough to need to have been considered by the Supreme Court in a recent case about a similar English law provision. They are issues that need to be thought about by anyone concerned with managing a company, not only from the perspective of the company (because it is required to keep a register of its directors and may be fined if it does not do so) but also personally because a person who acts as a director has duties and liabilities which come from being a director, even if they are not given the title of director.

One of the important effects of the definition of “director” set out in the Jersey Companies Law is that a company’s register of directors is not conclusive evidence as to whether a person is, or is not, a director. A company is required to record in a register details of all of its directors but if a person is not named on the register of directors, that does not mean that they are not a director, only that the company is in default and liable to be fined for having an incomplete register if that person is, in fact, a director. The position in this regard is different from the register of members of a company because the definition of a member for the purposes of the Jersey Companies Law is a person who has agreed to become a member of a company and whose name is entered on the register. In other words, you cannot be a member of a company unless your name has been included on the register of members but you can be a director even if you are not on the register of directors…

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