The Officers and Members of an English Company

Apr 23, 2026 | Business Law Articles

Understanding the difference between shareholders and directors is fundamental to UK company law and effective corporate governance.

Ownership and management are legally separate.

Shareholders (Members)

Shareholders own the company. They:

• Hold shares
• Receive dividends
• Vote at general meetings
• Approve changes to the articles of association
• Appoint and remove directors

They do not manage day-to-day operations.

Different classes of shares can carry different rights, including voting and dividend entitlements.

For companies limited by shares, shareholders’ rights are often further regulated by a shareholders’ agreement.

Directors

Directors manage the company’s operations and enter into business contracts on its behalf.

They owe statutory duties under the Companies Act 2006 and must:

• Act within their powers
• Promote the success of the company
• Avoid conflicts of interest
• Exercise reasonable care, skill, and diligence

Their authority comes from the articles of association and shareholder appointment.

Company Secretary

Public companies must appoint a company secretary. Private companies are not required to do so.

The secretary ensures compliance, maintains statutory registers, files documents at Companies House, and supports corporate governance.

Non-Statutory Titles

Titles such as CEO, CFO, or Managing Director are internal roles. They are not legal positions under the Companies Act 2006.

Understanding these distinctions helps ensure proper governance and compliance.

If you are setting up a company or reviewing your corporate structure, we can advise on directors’ appointments, articles of association, and shareholder arrangements.

As always, the team are here to help you. To get in touch just call us on 020 3740 2370 or email info@clearlybusinesslaw.co.uk