What is a shadow director?

In many circumstances, the law applies not only to a director, but to a 'shadow director'.

A shadow director is a person in accordance with whose directions or instructions the directors of a company are accustomed to act. Under this definition, it is possible that a director, or the whole board, of a holding company, and the holding company itself, could be treated as a shadow director of a subsidiary.

A founder or significant shareholder who wishes to escape the disclosure requirements of a directorship might still be counted as a 'shadow' director and held responsible for actions as if he or she were a formal director.

Professional advisors giving advice in their professional capacity are specifically excluded from the definition of a shadow director in UK companies legislation.

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