Last Updated on October 16, 2025 by Joy Kyalo
In the UK, a company can be appointed as another company’s director, however, with the new changes in regulations under the Economic Crime and Corporate Transparency Acts (ECCTA), the practice is set to be restricted.
The new rules want to ensure a company has at least one human as a director. However, the rules may come with exceptions which will be highlighted in this article.
Is it legal for a company to be appointed as a director of another company? This article will serve as a guide to help you understand the appointment of a corporate director, current reforms, and what companies should consider when appointing one.
Key Takeaways
- Corporate directors can be companies on a board, but at least one human director is required.
- From 2025, all directors must complete identity verification with Companies House.
- Large companies may appoint corporate directors if it supports a legitimate aim and follows transparency rules.
- Non-UK corporate directors should be replaced or made compliant; BusinAssist can assist with filings and appointments.
What is a corporate director?
A corporate director is a registered company acting as a director for another company. Unlike human directors, who oversee the company’s affairs, a corporate director is used for governance and control.
Under the Companies Act 2006, companies are permitted to be appointed as corporate directors. However, under section 155 of the Act, every company should have at least one human director. Companies can appoint corporate directors; however, they cannot be the sole directors of a company.
Why appoint a corporate director for your company?
Maintaining oversight: a corporate director maintains oversight and consistency of a company, especially in large corporate groups. They help to streamline decision-making by centralised governance.
Pro Tip: Benefits of Appointing a Corporate Director
A corporate director helps keep your company stable and ensures consistent governance, handling compliance, filings, and administration. They provide continuity that human directors can’t, making them ideal for large or complex corporate structures.
Privacy: companies use corporate directors to shield the identity of beneficial owners. However, this is less relevant due to the rules of People with Significant Control (PSC) where their information has to be disclosed.
Compliance management: Companies appoint corporate directors mainly to handle filings, governance, administration, and compliance.
Stability: a corporate director does not change due to illness, retirement, or resignation as human directors do.
Is it legal to have a corporate director in 2025?
The current changes that are supposed to take place in Autumn 2025, may restrict companies from appointing another company as their director. Before we dive deep into the new regulations, let us understand the current situation as of 2024.
Currently, a company can be a director of another company, at least one director must be a natural person. This means the company will have two directors, a corporate and a natural person.
Changes coming in 2025:
The use of corporate directors (companies being directors of other companies) is being phased out. A new rule requires all directors, including existing ones, to have their identity verified by Companies House.
This ID verification process is designed to enhance corporate transparency and combat money laundering.
A company will still need at least one natural person on its board.
However, there may be exceptions for corporate directors that are UK-registered and where all the directors of that company are individuals who have verified their identity.
What are the conditions for becoming a corporate director in 2025?
Must have at least one human director: Alongside a company director, the company must have at least one human director. Submission of UK company registration forms with no human director will be rejected by Companies House.
If a company has both corporate and human directors and due to any circumstances the human director resigns the company will be in ‘default’ since companies cannot be sole directors.
ID verifications: This has been added to enhance transparency and combat money laundering. When appointing a corporate director, the details from the company structure, when it was registered, and the registration number to its principal office must be provided.
Pro Tip: Key Conditions for Appointing a Corporate Director
To appoint a corporate director, ensure your company has at least one human director and meets all ID verification requirements. The corporate director must be a UK-registered entity, comply with the Articles of Association, and for large companies, demonstrate a legitimate purpose for the appointment.
Must be a UK legal entity: The entity must be a registered UK company and all its directors’ identities must be verified. The company should make its directors’ information publicly available in the Companies House register.
This enhances transparency and tracing back responsibilities by identifying persons of the corporate director.
Articles of Association do not prohibit: A legal entity cannot be a corporate director if its Articles of Association prohibits the same as the company making the appointment. Some companies may have specific directions on director appointments.
Large companies exception: The ban on appointing corporate directors is not absolute since it has some exceptions, especially for large companies. Large corporates must demonstrate that the appointment of a corporate director will help them achieve a legitimate aim and that the company in question is transparent and accountable as subject to the law just as individual directors.
What are the implications for companies with corporate directors in 2025?
Companies currently using non-UK corporate directors should start planning to replace them with natural persons or UK-registered corporate directors that meet the new identity verification requirements.
Companies must be aware of the new ID verification requirements for all directors, including existing ones, and ensure they are met on time.
Companies should also be aware of the new regulations regarding UK Registered Office Addresses and the requirements for Authorised Corporate Service Providers (ACSPs).
How to appoint a corporate director
The appointment of a corporate director is the same as that of an individual director. If the appointment of a corporate director is during the incorporation process, you must complete the IN01 form by filling out all the information.
If the appointment is after the company is formed, the initial process must be followed before notifying Companies House. The process includes:
Review of the company’s Articles of Association: Articles of association have provisions on how the director should be appointed. It may specify the resolutions that the company should follow, whether is the board resolution, shareholder resolution, or both.
Obtain consent from the corporate director: A corporate director just as the individual director, must consent to the appointment through a written statement.
Pass resolution: The appointment is formalised through a resolution through a board of directors or shareholders or a combination of both.
Notify Companies House: Within 14 days after the director’s appointment the company must notify Companies House.
Is it legal for a company to be appointed as a director of another company? While a legal entity can be a director of another company, new specific regulations must be followed by Autumn 2025. The new regulations look forward to banning the appointment of a corporation director but there are exceptions. Large corporations can appoint a corporate director if they prove it can help them achieve their legitimate aim. The corporate director must go through the ID verifications and directors’ details are available in the public record.
BusinAssist can help you align with the regulations taking effect this Autumn. If you have a non-UK corporate director, you must replace them with a UK-registered company or a human director to comply with the regulations.
We can help you notify Companies House through our company structural change service and also our filing Confirmation Statements services at an affordable price.
For more information on notifying Companies House of the appointment of a new director, contact us at info@businassist.com.
FAQs
Q: Can a company be a director of another company in the UK?
Ans: While a company can be a director of another company, the company must have at least one human director.
Q: Is it legal for a company to act as a director for another company?
Ans: It is legal for a company to act as a director of another company as long as the company it is appointed to has at least one human director.
Q: How can a company appoint another company as its director?
Ans: A company can be appointed as a director through an ordinary resolution passed by the shareholders, and supported by a majority vote. The company must provide written consent to accept the appointment and take on the responsibilities. The company must file the details with Companies House 14 days after the appointment.
Q: Will Companies House allow a company to be a director in 2025?
Ans: In 2025, a company cannot appoint another company as a director due to the new regulations introduced under the Economic Crime and Corporate Transparency Act.
Q: Can a company be a shadow director?
Ans: While a company cannot formally be appointed as another director, it can be a shadow director if the other company’s directors are accustomed to acting on its directions or instructions.
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Joy is a content writer at BusinAssist with 6+ years of experience in content marketing and social media strategy. She specialises in company formation and virtual operations, guiding entrepreneurs through global markets with clarity, drawing on her marketing and PR background. Business Assist with BusinAssist – your business success partner.