Limited Company Directors

There are a lot of duties involved in starting up your own business through a limited company - you might be aware of some of the more commonly known responsibilities and duties, but can you be sure you know them all?

Every director or a limited company should know what comes with the position and what the law asks of them…read on to find out what responsibilities come with the title.

Directors’ Duties

The role of director comes with a legal code of duties that must be adhered to to stay in business.  These codes are outlined in the Companies Act 2006 and are outlined as below;

•    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

As a company director it is your job to follow these legal outlines to the letter.  However, your role doesn’t stop there as there are more financial and legal responsibilities that must be stuck to.

Financial

Although it is your job to make sure that the following tasks are given the attention they need, most director’s  will do well by hiring an accountant who is able to fulfil the roles properly.

•    Maintain strong accounting records that portray a true and fair representation of the financial position of the company.
•    Your business should submit a corporation tax return to HMRC.
•    Your business needs to have accurate company accounts in place which should be handed in to Companies House
•    You need to make sure that any due tax liabilities are paid.
•    Staff must be paid correctly and legally - this includes yourself.  This also means that all income tax and national insurance contributions are met where applicable.
•    You must make sure that all the financial liabilities of your business are met while maintaining a solvency for your business.

Legal

As the director of your company you also have to concern yourself with the legal responsibilities of your company.  These responsibilities include;

•    You must complete and return an annual return.
•    If anything changes in your business regarding directors or secretary’s for example, you must submit forms to Companies House informing them.
•    If your company changes its address then you must inform Companies House by completing Form 287.
•    When it comes to shareholders, you are legally bound to make decisions that move the company in their interests.  In this light any decision made cannot knowingly harm the company.

Do You Know Your Responsibilities?

Are you aware of the responsibilities you have towards your small business?  Have you found our advice useful?  Leave us a comment and let us know…

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