Why is it not recommended to appoint many
directors when register a new company?
We often get requests for large numbers of
individuals to be appointed as directors of the same company usually for the
perceived status of being a director. This
is not always advisable for the following reasons:
1.
Individual credit checks are done on each director before opening a
bank account and if one has a bad record the banks won’t open the account.
2.
For all overdraft facilities each director must sign personal surety.
3.
All directors have a fiduciary responsibility, meaning they can be
held personally liable if they trade recklessly.
4.
Increase administration regarding all company secretarial work.
5.
If the company is de-registered the directors can be held personally
liable for any of the liabilities.
6.
The decision making process is cumbersome.
7. When registering a company It
is therefore better to be shareholder rather than a director as shareholders own
and control the company without the liability.
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