Legal Consultation/ change for UK Company Structure: Amend Articles of Association + Appoint Limited-Power UK Director
Budget: €250 – €750 EUR
Good afternoon. We are writing to request legal assistance regarding our UK-based company, which was recently incorporated with two EU-based co-founders who currently serve as the only directors and shareholders.
Due to the onboarding requirements of certain payment service providers, we are now seeking to appoint a third director who is a UK resident or citizen, in order to fulfill the local residency requirements necessary for verification and approval.
1. Objective
Our intention is to appoint this third UK-based director with strictly limited authority, both legally and functionally. Specifically:
• The director must have no access to the company’s finances, banking, or payment accounts;
• They should not possess any representative powers (e.g., signing contracts, opening accounts, engaging in transactions, or acting on behalf of the company externally);
• Ideally, their only functional role would be:
• to receive post at the UK-registered office, and
• to appear formally in the company’s records for compliance purposes;
• to represent the company only if absolutely required by UK law (e.g., in the event of local correspondence or proceedings).
All actual business decisions, contracts, and financial operations should remain fully under the control of the two founding directors, and decisions of material nature should be tied, as far as possible, to shareholder resolutions only.
2. We kindly ask your support with the following:
A. Legal Structure and Documentation
• Reviewing and, if necessary, amending the Articles of Association to:
• Establish that all key structural and strategic decisions (including the appointment or removal of directors, and the granting of signing or representative authority) are made exclusively by unanimous shareholder resolution (currently 50/50 between the two founders);
• Clearly define that the board of directors operates under the authority of the shareholders, and that no director may act unilaterally or bind the company without prior shareholder approval;
• Delegate full management authority and signing rights solely to the two co-founding directors, ensuring they retain complete operational control over the company;
• Restrict any individual director from acting unilaterally, and require a quorum that includes both founders for any valid board decisions;
• Appoint a third UK-resident director strictly for compliance purposes, with explicitly limited functions and no financial, legal, or representative authority.
• Drafting any necessary supporting documentation, such as internal resolutions, governance protocols, or shareholder agreements, to formalise and enforce this governance structure.
B. Director Appointment Procedure
• Providing the legally correct procedure for:
• Convening a board meeting (or issuing a written resolution) to appoint the third director;
• Drafting a Director Service Agreement with explicitly limited responsibilities;
• Preparing and filing the required Companies House documentation (e.g., AP01).
C. Limitation Agreements and Risk Mitigation
• Drafting a Letter of Limitation of Authority or equivalent document explicitly outlining outlining the restrictions on the UK-resident directors authority without prior consent;
• Optionally, drafting a non-disclosure agreement, and a declaration confirming fiduciary obligations;
• Confirming whether such a limitation structure is enforceable and sufficient under UK law.
3. Additional Input
We would greatly appreciate your professional opinion on:
• Whether this is the most secure and legally appropriate structure, or if there are more robust alternatives;
• Whether it is legally sound and acceptable under UK company law to appoint a director whose role is purely formal (e.g., for address and compliance only), without operational involvement;
• If there are any statutory limits or best practices we should be aware of when creating such a limited role.
Could you please also let us know estimated fee for this work and the expected timeline for completion?
Due to the onboarding requirements of certain payment service providers, we are now seeking to appoint a third director who is a UK resident or citizen, in order to fulfill the local residency requirements necessary for verification and approval.
1. Objective
Our intention is to appoint this third UK-based director with strictly limited authority, both legally and functionally. Specifically:
• The director must have no access to the company’s finances, banking, or payment accounts;
• They should not possess any representative powers (e.g., signing contracts, opening accounts, engaging in transactions, or acting on behalf of the company externally);
• Ideally, their only functional role would be:
• to receive post at the UK-registered office, and
• to appear formally in the company’s records for compliance purposes;
• to represent the company only if absolutely required by UK law (e.g., in the event of local correspondence or proceedings).
All actual business decisions, contracts, and financial operations should remain fully under the control of the two founding directors, and decisions of material nature should be tied, as far as possible, to shareholder resolutions only.
2. We kindly ask your support with the following:
A. Legal Structure and Documentation
• Reviewing and, if necessary, amending the Articles of Association to:
• Establish that all key structural and strategic decisions (including the appointment or removal of directors, and the granting of signing or representative authority) are made exclusively by unanimous shareholder resolution (currently 50/50 between the two founders);
• Clearly define that the board of directors operates under the authority of the shareholders, and that no director may act unilaterally or bind the company without prior shareholder approval;
• Delegate full management authority and signing rights solely to the two co-founding directors, ensuring they retain complete operational control over the company;
• Restrict any individual director from acting unilaterally, and require a quorum that includes both founders for any valid board decisions;
• Appoint a third UK-resident director strictly for compliance purposes, with explicitly limited functions and no financial, legal, or representative authority.
• Drafting any necessary supporting documentation, such as internal resolutions, governance protocols, or shareholder agreements, to formalise and enforce this governance structure.
B. Director Appointment Procedure
• Providing the legally correct procedure for:
• Convening a board meeting (or issuing a written resolution) to appoint the third director;
• Drafting a Director Service Agreement with explicitly limited responsibilities;
• Preparing and filing the required Companies House documentation (e.g., AP01).
C. Limitation Agreements and Risk Mitigation
• Drafting a Letter of Limitation of Authority or equivalent document explicitly outlining outlining the restrictions on the UK-resident directors authority without prior consent;
• Optionally, drafting a non-disclosure agreement, and a declaration confirming fiduciary obligations;
• Confirming whether such a limitation structure is enforceable and sufficient under UK law.
3. Additional Input
We would greatly appreciate your professional opinion on:
• Whether this is the most secure and legally appropriate structure, or if there are more robust alternatives;
• Whether it is legally sound and acceptable under UK company law to appoint a director whose role is purely formal (e.g., for address and compliance only), without operational involvement;
• If there are any statutory limits or best practices we should be aware of when creating such a limited role.
Could you please also let us know estimated fee for this work and the expected timeline for completion?