- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Hi Mike.
I understand the textbook definition of a de facto director and shadow director, however I do not understand how these would work in the real world.
Could you help me understand by giving my practical examples of what might qualify as a de facto director and a shadow director?
Thank you in advance.
The distinction is becoming less clear – as you will see if your read the (brief but interesting) article on this link
https://www.fieldfisher.com/publications/2011/02/what-is-a-de-facto-director#sthash.7lj8oCrI.dpbs
(I like the title that Fieldfisher has given to the respondents … The Commissioners for Her Majesty’s Revenue and Customers)
Shadow directors are people upon whose instructions the directors are accustomed to act
In the case Gilford Motor Company v Horne, Mrs Horne was the sole director but she knew little of the motor trade. Her husband, however, had recently left the Motor Company but a restrictive covenant prevented him from setting up in opposition
So Mrs Horne set up the Horne Motor Company and Mr Horne gave the instructions that were followed by Mrs Horne
Clearly Mr Horne was operating as a shadow director
Historically de facto directors were often those who openly acted as directors but whose appointment was defective (or non-existent) in some way
Read the article and see if that makes it any easier
- The topic ‘de facto director, shadow director’ is closed to new replies.