Directors’ responsibilities

4th January 2018

 

Limited company directors and secretaries are collectively referred to as ‘officers’. Directors are appointed by members (shareholders and guarantors) to run and manage the day-to-day operations of the business. Secretaries are optional for private companies, but not public companies. They are usually appointed to assist directors with important administrative tasks.

An Overview

Company directors are responsible for the management of their companies. They must act in a way most likely to promote the success of the business and benefit its shareholders. They also have the responsibilities to the company’s employees, its trading partners, and the state.

Directors are required to run a company in accordance with the Companies Act and the articles of association. They are placed in a position of trust and expected to promote the success of the business and make decisions for the benefit of the company alone, not for personal gain.

Directors are legally responsible for ensuring all filing and reporting requirements are met. This includes:

  • Registering the company for business taxes
  • Preparing and delivering confirmation statements, annual accounts and tax returns every year
  • Maintaining accurate accounting and company records
  • Making these records available for public inspection
  • Report changes to Companies House and HMRC
  • Managing payroll and PAYE

You can hire other people to manage some of these things day-to-day (for example, an accountant) but you’re still legally responsible for your company’s records, accounts and performance.

Other company records

As director, you should also keep detailed records regarding the company in regards to:

  • Directors, shareholders and company secretaries
  • The results of any shareholder votes and resolutions
  • Promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to
  • Promises the company makes for payments if something goes wrong and it’s the company’s fault (‘indemnities’)
  • Transactions when someone buys shares in the company
  • Loans or mortgages secured against the company’s assets

Potential penalties

Failure to uphold these statutory duties can lead to fines, prosecution and disqualification. Exercise your responsibilities carefully as the penalties for failure to do so can be severe.

For further advice and support on directors’ responsibilities, contact your usual Whiting & Partners representative who will be happy to discuss in more detail.

Disclaimer - All information in this post was correct at time of writing.
Other Blogs
Nick Edgley
26th February 2024 Short Term Lets and Airbnb: Planning Permission

Thinking of offering your property for short term lets? Planning permission may be required.   What’s Changing? From this summer the Government will introduce legislation to require owners of new short term lets in England to secure planning permission to use their properties for this purpose. You will need to be aware of this requirement…

Maddie Milner
22nd February 2024 Companies House fees increasing

From 1st May 2024, Companies House fees are increasing. These increases are following the announcement of the Economic Crime and Corporate Transparency (ECCT) Bill, which is giving Companies House greater powers in verifying the accuracy of information and tackling economic crime.   Some of the main rises in costs are as follows:   New fee…

Louise Bassett
21st February 2024 How is the government supporting farmers?

Let’s ask the question, ‘How is the government supporting farmers?’   DEFRA shared a press release from the Prime Minister yesterday, citing his and his party’s commitment to farmers and rural communities.   We already know that Sustainable Farming Incentive (SFI) and Countryside Stewardship payments are being increased across the board by approximately 10%, but…

Shamus Chaplin
20th February 2024 Update on Double-Cab Pick-Ups: HMRC are reversing

Update on Double-Cab Pick-Ups   On the 12th February 2024, HMRC announced that their interpretation of the legislation had changed regarding the favourable tax treatment of pick-up trucks from 1st July 2024. However, after consulting farmers, construction workers and other industry professionals they have now reversed their decision!     Current Position HMRC interprets the…

Ian Piper
19th February 2024 SME Ely Business Awards 2024: 1 Week Left To Enter!

There is just one week remaining to enter the SME Ely Business Awards for 2024!   Celebrate your business’ achievements and be in with a chance of winning by entering today. Entries close on Thursday 26th February 2024 at 3pm. Find Out More Click here to find out more about the SME Ely Business Awards…

Maddie Milner
16th February 2024 Companies House changes from 4th March 2024

,Find out more about the upcoming Companies House changes from 4th March 2024 here.     Registered email addresses One of the main changes from the 4th March 2024 are Companies House require all companies to provide a registered email address which will be collected within your companies next Confirmation Statement.   New companies will…