In Gemma Ltd (in liquidation) v Davies and another [2008] EWHC 546 (Ch), [2008] WLR (D) 89, the High Court explored the circumstances in which an individual would be regarded as a de facto director for the purposes of Section 212 of the Insolvency Act (1986). The judgment, which has not yet been published on BAILII, contains a useful overview of the authorities. The trial judge outlined several principles:
(1) It must be proved that the alleged de facto director performed functions that could only be discharged by a director.
(2) There is no need to prove that a de facto director was held out as a director.
(3) The director must have participated on an equal footing with the other directors and not in a subordinate role.
NB: The Companies Act (2006) does not contain a specific definition for de facto director. Section 250 does, however, define the term "director" (in such a way as to include de facto directors) and Section 251 defines the term "shadow director".
(1) It must be proved that the alleged de facto director performed functions that could only be discharged by a director.
(2) There is no need to prove that a de facto director was held out as a director.
(3) The director must have participated on an equal footing with the other directors and not in a subordinate role.
NB: The Companies Act (2006) does not contain a specific definition for de facto director. Section 250 does, however, define the term "director" (in such a way as to include de facto directors) and Section 251 defines the term "shadow director".
