De facto meaning

Re Grosvenor Property Developers Ltd (in liquidation) Atkinson and another v Varma (also known as Sanjeev Varma) and others [2020] EWHC 1114 (Ch) What are the practical implications of this case? There are four practical consequences flowing from this ruling: It firmly affirms that a defendant who has been debarred may not at all advance submissions in their own defence, save to point out obvious, manifest errors. It also delineates how far, in practice, the claimant must go to properly establish the claim against such a party. It offers an instance of a highly persuasive forensic case, without any expert opinion or cross-examination, that both documents and individuals were inventions. It considers the line between de facto directors and shadow directors. It exemplifies an award of compound interest in a dispute concerning the misapplication of corporate funds. What was the background? The company raised approximately £7.5m from investors to transform a derelict hotel into student housing. By the...

Lime and Black BPS Ltd (in liquidation) v Gill and others [2024] EWHC 1898 (Ch) What are the practical implications of this case? Many insolvency practitioners confront incomplete or almost non-existent books and records. That does not stop the court receiving oral testimony and setting it against the limited paperwork or other established/proven facts. In this matter, the court proceeded step by step, weighing what it had heard with what it could see, and reached a series of conclusions, not all to the applicant liquidator’s benefit. Those conclusions were sufficient for the court to find that the respondent was a de facto director, that he had breached his duties as a director, and that he should be held liable for all payments made by the company to him and for payments made by the company to third parties from accounts under his control. Take witness evidence from the key participants, even where their accounts conflicted; Compare and test the inconsistencies between those accounts; ...

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This Practice Note provides an overview of the legal position relating to de facto and shadow directors of a company, pursuant to the Companies Act 2006 (CA 2006) as well as the common law. Definition of 'director' CA 2006 provides a broad, inclusive description of a director as 'any person occupying the position of director, by whatever name called'. On that footing, and within that definition, the courts have recognised two classes of director: de jure directors, namely those directors properly and validly appointed in line with the company’s articles of association and CA 2006; and de facto directors A further category, described as 'shadow directors', is separately defined in CA 2006. A single individual may simultaneously fall into both shadow and de facto categories, for example where they perform a director’s role in one area of the business whilst directing the board in respect of another. The remainder of this Practice Note considers the legal rules applicable...

Under Directive 2004/38/EC, the Citizens’ Directive Nationals of the European Economic Area (EEA)—which includes the EU Member States, Norway, Iceland and Lichtenstein—benefit from EU free movement law. In this Practice Note, references to ‘EU citizens’, meaning nationals of EU Member States, are understood to include EEA nationals. The Citizens’ Directive identifies two additional categories of relatives of EU nationals who are exercising treaty rights in another Member State, beyond those classed as direct ‘family members’: those in a ‘durable relationship’ with an EU national, which is ‘duly attested’; or ‘other family members’, who: were dependants of the EU national, or members of the EU national’s household, before the EU national came to the host Member State; or have serious health grounds that strictly require their personal care by the EU national See Practice Note: Family members of EU nationals—definitions and rights of entry and residence for the definition of primary...

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025), which obtained Royal Assent on 20 March 2025, enacts measures scrapping the remittance basis and introducing a residence-based system, effective from 6 April 2025. FA 2025 also substitutes domicile as the principal criterion for determining exposure to inheritance tax. Additional reforms cover revisions to the rules for excluded property status, the removal of protected settlements status for offshore trusts, and adjustments to overseas workday relief. For details on these updates, refer to: Practice Notes: The abolition of the remittance basis of taxation from 2025–26, A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. This Practice Note examines shadow directors of offshore companies and the degree to which such individuals might incur benefit in kind charges under the benefits code in the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). Note that the notion of a shadow director...

Definitions CA 2006 means the Companies Act 2006; Company means [ insert name of target company ] Limited, incorporated in England and Wales under number [ insert company number ]; Director refers to a director of any Group Company, including a shadow or de facto director; Employee has the meaning in section 230(1) of ERA 1996 as applied to any Group Company; EqA 2010 means the Equality Act 2010; ERA 1996 means the Employment Rights Act 1996; [ Group means the Company and each of the Subsidiaries, and Group Company means any of them; ] [ Subsidiaries means the subsidiaries of the Company; ] [ subsidiary means [ a subsidiary as defined by section 1159 of CA 2006 OR a subsidiary undertaking as defined by section 1162 of CA 2006 ]; ] Contractor denotes any individual working in a Group Company’s business who is neither an Employee nor a Worker; TUPE 2006 means the Transfer of Undertakings...