Directors’ Responsibilities
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What are directors’ responsibilities? As a director, you are legally responsible for running the company. This must be done in line with both the articles of association and Companies Act 2006.
A key role is to ensure that all statutory reporting requirements are met. This includes, but is not limited to:
- Filing the annual accounts with Companies House by the deadline,
- Filing the tax returns with HMRC by the deadline, and ensuring this tax liability is paid,
- Keeping company records up to date and reporting any changes to the relevant body, and
- Maintaining accurate accounting and company records.
Third parties may be hired to manage some of these items day-to-day (for example, an accountant) however, the ultimate legal responsibility of the company’s records, accounts and performance remains with the director.
Other duties of a director include:
- Acting in the best interests of the company, in order to promote its success,
- Using your own independent judgement, and not allowing others to control your powers,
- Performing to the best of your ability, through exercising reasonable care, skill and diligence,
- Making other directors aware of any instances where you may personally benefit,
- Avoiding conflicts of interest, and
- Applying confidentiality about the company’s affairs.
Failure to uphold these statutory duties can have serious consequences, such as fines, prosecution or disqualification from being a company director.
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Disclaimer - All information in this post was correct at time of writing.