We are often asked to clarify the responsibilities that directors take on when they agree to become directors of limited companies. A summary of directors’ duties published on the GOV.UK website are reproduced below.
As a director of a limited company, you must:
- try to make the company a success, using your skills, experience and judgment
- follow the company’s rules, shown in its articles of association
- make decisions for the benefit of the company, not yourself
- tell other shareholders if you might personally benefit from a transaction the company makes
- keep company records and report changes to Companies House and HM Revenue and Customs (HMRC)
- make sure the company’s accounts are a ‘true and fair view’ of the business’ finances
- file your accounts with Companies House and your Company Tax Return with HMRC
- pay Corporation Tax
- register yourself for Self-Assessment and send a personal Self-Assessment tax return every year – unless it’s a non-profit organisation (e.g. a charity) and you didn’t get any pay or benefits, like a company car
You can hire other people to manage some of these things day-to-day (e.g. an accountant) but you’re still legally responsible for your company’s records, accounts and performance.
Another issue that is frequently asked is what information about the company should be displayed on business signs and stationery. From the same source these are:
You must display a sign showing your company name at your registered company address and wherever your business operates. If you’re running your business from home, you don’t need to display a sign there. For example, if you are running 3 shops and an office that’s not at your home, you must display a sign at each of them.
The sign must be easy to read and to see at any time, not just when you’re open.
Stationery and promotional material
You must include your company’s name on all company documents, publicity and letters.
On business letters, order forms and websites, you must show:
- the company’s registered number
- its registered office address
- where the company is registered (England and Wales, Scotland or Northern Ireland)
- the fact that it’s a limited company (usually by spelling out the company’s full name including ‘Limited’ or ‘Ltd’)
If you want to include directors’ names, you must list all of them.
If you want to show your company’s share capital (how much the shares were worth when you issued them), you must say how much is ‘paid up’ (owned by shareholders).
Source: New feed