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.
Duties of limited company directors
The Companies Act 2006 outlines the statutory duties of company directors as seven general duties;
- Duty to act within your powers as a company director
- Duty to promote the success of your company
- Duty to exercise independent judgement
- Duty to exercise reasonable care, skill and diligence
- Duty to avoid conflicts of interest
- Duty not to accept benefits from third parties
- 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.
Legal responsibilities of company directors
- You are responsible for completing and returning the Annnual Return (Form AR01).
- 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.
More on limited companies
You can find out more about limited companies and their administration in these other ByteStart guides;