Abstract:
Purpose - To explore the ways in which an individual can become a company director through the process of de facto directorship and the distinguishing characteristics of this type of director in terms of company law. Design/methodology/approach - A review of the literature of the origins and nature of de facto directorship is presented. Discusses the way that de facto directors are individuals who perform the functions and exercise the powers of directors but who are not de jure directors because they have not been appointed correctly, they have ceased to be qualified to act, or they have not been appointed at all. Provides legal cases to assist in identifying the essential functions of directors and the source of powers for directors that exists outside of the articles of association. Findings - The discussion includes: the statutory context for de facto directorship and de facto directors as occupiers of the office of director; de facto directors as a type of de facto officer; modern developments in the law of de facto directorship; tests for de facto directorship; and the role and significance of de facto directorship in company law. Concludes that this examination of de facto directorship reveals the real nature of the officer of director and reconnects company law with its neglected origins. Originality/value - Challenges the conventional view that the relationship between the shareholders and the directors is determined by, and can be explained solely in terms of, a nexus of contracts.
