Directors’ Duties in the Republic of Ireland

>> Board Requirements in the Republic of Ireland

Appointment of directors

Under the Act, a limited company will be permitted to have just one director. Every company must still have a Company Secretary, who may be one of the directors; however where the company has only one director, that director cannot also hold the office of secretary.

Any appointment of a person as a director of a company without his or her consent is void. This consent must include a statement by the person being appointed acknowledging the legal duties and obligations that they will have as a director:

  • directors (other than the initial directors) can be appointed by the members of the company in a general meeting, unless the company’s constitution provides otherwise
  • similarly, unless the constitution provides otherwise, the directors of a company may appoint directors to fill vacancies or as additional directors but they will hold office only until the next following AGM and then shall be eligible for re-election

The Company may, by ordinary resolution, increase or reduce the number of directors that may be appointed.

Board meetings and composition requirements

Only natural persons may act as a director.

An individual cannot be appointed if they are:

  • a body corporate
  • undischarged bankrupt may not act as director and it is a criminal offence for such an undischarged bankrupt to act as a director of a company without leave of the High Court
  • a person who is listed as a restricted or disqualified
  • any director who has tendered his resignation in writing to the Company, save for those holding an executive position for a fixed period
  • any person deemed incapable of performing his duties by reason of mental disorder, as judged by his co-directors
  • persons under the age of 18 years
  • an unincorporated body of persons

At least one director of the company must be resident in an EEA state, save in cases where a company obtains a certificate from the Registrar of Companies that it has a real and continuous link with one or more economic activities in Ireland, or holds a bond in the prescribed form.

The following conditions may restrict an individual from acting as a director:

Signatory rights/powers of directors

To pass a board resolution a simple majority is required, ie the affirmative vote of two (2) out of the three (3) directors.

Conflicts

As a general rule, a director shall not gain, or profit, from his fiduciary position. A director shall not place himself in a position whereby his paramount duty to the Company comes into conflict with his own personal interests, as per the fiduciary relationship status between a company and a director.

A director who is, in any way, directly or indirectly interested in a contract or proposed contract to which his or her company is a party, shall have a duty to disclose the nature of that interest at a meeting of the directors. This is, in the main, a restatement of the existing law.


Latest version updated 6th April 2018

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