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.



 
Other items in Blogs
 
Lucy Bayliss
8th January 2020 It’s the final countdown!

There are only 23 days until the self-assessment tax return deadline of 31 January 2020. If your return is not filed electronically by this date, an automatic £100 penalty will be applied. Please note that the deadline for filing a paper tax return was 31 October 2019 and therefore all returns are required to be…

Read More »

Vanessa Pearson
13th December 2019 April 2020 Proposed IR35 changes: Status appeals process

As the planned changes to who determines IR35 status are fast approaching, contractors would be well advised to review their contracts on HMRC’s updated CEST (Check Employment Status for Tax) tool. Having provided answers to questions regarding substitution, control and nature of the work, the updated tool will give HMRC’s view of the workers employment…

Read More »

Ben Kilby
12th December 2019 VAT Surcharge

Have you or your business received one between 23 April 2018 and 31 January 2019?   If so, you may want to check if it has been dated. If it has not been dated you may be in for a refund. Any surcharge liability notice or surcharge liability notice extensions are invalid if they have…

Read More »

Lucy Bayliss
25th November 2019 Don’t let your tax bill affect your festive joy. Instead, spread your tax payments throughout the year!

With the festive period fast approaching, it is easy to lose sight of your self-assessment tax return!   If you are employed or receiving a pension and you file your return before 30 December 2019, you can elect to have your tax collected through ‘Pay As You Earn’ (PAYE) rather than paying one lump sum…

Read More »

Ian Piper
22nd November 2019 2019 Growth: Missing in action?

(Data Source) As another year draws to a close, local SME businesses will be forgiven for looking forward to drawing a line under it. With 2019 sales growth barely nudging 1%, it has been a year of focusing on not slipping backwards, rather than the usual mantra of continually signing up new accounts.  When commentators…

Read More »

Mark Burrows
21st November 2019 Avoiding Self Assessment Tax Scams

HM Revenue & Customs have reminded Self Assessment taxpayers to watch out for fraudsters as the tax return filing deadline of 31 January approaches.   HMRC say they have received nearly 900,000 reports of suspicious phone calls, texts or e-mails from scammers pretending to be the tax authority.  Most of these messages were about fake…

Read More »