We are often asked to explain the role a director is required to undertake for an incorporated business. It is wise to take this question seriously as these responsibilities are written into company law – break them at your peril.
The government website lists these duties as follows.
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 a Company Tax Return and pay Corporation Tax
- register 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.
You may be personally liable for your company’s business liabilities and be fined, prosecuted or disqualified as a company director if you don’t follow the rules.
Taking on an appointment as a director should not be undertaken lightly. Readers who have been asked to act and are still unsure if they should accept should take professional advice.
Source: New feed.