If you have set up in business via a limited company, there are a number of duties you will have – as well as legal and financial responsibilities – if you are a director of the company. This article provides an overview of what to expect as a company director.
The Companies Act 2006 codifies the duties of company directors into a statutory statement of seven general duties, as follows:
1) Duty to act within your powers as a company director
2) Duty to promote the success of your company
3) Duty to exercise independent judgement
4) Duty to exercise reasonable care, skill and diligence
5) Duty to avoid conflicts of interest
6. Duty not to accept benefits from third parties
7) Duty to declare interest in proposed transaction or arrangement with the company
You can read more about these duties, in much greater detail, in our article – Companies Act 2006 and Directors’ Duties.
As a company director, you have several accounting-related obligations. Although you should employ a small business accountant to perform all (or most) of these tasks, you are ultimately responsible to ensure that all tasks are carried out:
- Keep good accounting records from which accounts can be prepared which give a true and fair representation of the financial position of the company
- You must submit accurate company accounts, and file them on time with Companies House
- You must submit your corporation tax return (Form CT600) to HMRC and pay any tax liabilities due.
- You must deal with the correct payment of staff (and yourself) – including the deduction of income tax and national insurance contributions, where they apply.
- You must trade solvently, ensuring that you are able to meet the financial liabilities of your business.
- You are responsible for completing and returning the annual return (Form AR01 from 1st October 2009)
- Submit forms to Companies House to notify of any changes in the particulars of company director(s) or secretary.
- Notify Companies House if you change your registered company address.
- You must always act in the interests of the company shareholders. This means that the directors cannot enrich themselves in a way that damages the company.
- Companies House – Company Director information.