Who should be a director of the Company? For a small trading company, a company acting as trustee, or a company owning property etc Companies are artificial legal persons used to limit liability. A company can enter contracts, sue and be sued. Generally the director of the company can hide behind the corporate veil of the company so that if the company is sued the director(s) are not liable. But there are exceptions. If the directors cause the company to breach laws the directors can be personally liable. One example is trading while insolvent, another is the payment of taxes. The other way a director can be personally liable is to give a personal guarantee for the company. Usually those contracting with companies will know that the company could be a worthless shell so they will often insist on obtaining a personal guarantee from all directors. This the case when companies borrow to buy property. Naturally the risks associated for a director being sued in relation to their role with the companies can be reduced for the people behind the company if the directors are limited to 1 person. This can also stretch borrowing power further. But there are other risks with not being a director as you will not control the actions of the company and the director could cause the company to enter contracts and take risks that you may not be comfortable with. Plan carefully.