Q&As

Can a local authority (district council) be appointed as a company director?

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Published on LexisPSL on 09/06/2020

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Can a local authority (district council) be appointed as a company director?
  • Company law perspective
  • Local authority—legal status
  • Capacity and power of competence

Company law perspective

The Companies Act 2006 (CA 2006) distinguishes between two types of legal entity that might serve as a company director, namely an 'individual' (CA 2006, s 163) or 'a body corporate, or a firm that is a legal person under the law by which it is governed' (CA 2006, s 164), and requires that certain specific particulars of each type need to be recorded. Examples of the sort of entity envisaged by CA 2006, s 164 include another company or limited liability partnership, whereas a general partnership would not qualify as it is not a legal entity in its own right. Therefore, if a specific local authority is treated in law as either type of legal entity, then it would appear that it can be a company director in its own name (as opposed to simply putting forward one of its employees to serve as a director on an associated or arms length company).

It should also be noted, as an ancillary point, that a company must have at least one director who is a natura

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