The paper seeks views on circumstances where use of corporate directors of UK companies should be allowed and covers other legal entities, including Limited Liability Partnerships (LLPs) and their corporate members.

When the idea was first mooted by BIS, it met with stringent opposition. At the time, ICAEW said it was concerned that the current suggestion that corporate partners should not be allowed by LLPs was ‘dangerously anti-business’ and that this ‘could have a significant impact both on a number of existing LLPs which have corporate members and also future use of LLPs’.

The revised poposals build on the original findings from the Transparency and Trust discussion paper which helped the government conclude that directors should normally be individuals.

As a result, the government plans to prohibit corporate directors generally, but it has agreed that they would be allowed in certain circumstances. It would be an offence to purport to appoint a corporate director outside these circumstances.

BIS wants feedback on whether the use of corporate directors could continue in certain circumstances, including:

• UK companies with shares admitted to trading on regulated markets;
• UK companies with shares admitted to trading on prescribed markets in the UK;
• large public and private companies in group structures;
• companies regulated by sector such as charitable companies and trustee companies of pension funds; and
• other legal entities such as LLPs.

The closing date for the consultation is 8 January 2015.

The consultation document is available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/378197/bis-14-1017-scope-of-exceptions-to-prohibition-of-corporate-directors.pdf