What are my legal duties as a Company Director?
Anyone can be a director of a company so long as they aren't an undischarged bankrupt or have been disqualified from being a director.
The director, or directors, must manage the company's affairs in accordance with its Articles of association and the law.
The Companies Act 2006 states that a director should act within their powers and promote the success of your company, exercise independent judgement, reasonable care, skills and diligence while avoiding conflicts of interest and not accepting benefits from third parties.
In essence this means that a director should act within the interests of the company's shareholders but there is now this bigger picture laid down by The Companies Act, previously only contained in case law.
As well as that general framework of duties, more specifically a director must ensure accurate accounts and various other documents are filed at Companies House on time as well as being responsible for ensuring the correct amounts of tax, VAT and NI contributions are paid on time.
Every limited company director has a personal responsibility to make sure that certain documents are delivered to Companies House on time. These include:
• annual returns;
• notice of change of director(s) (or secretaries);
• change of registered office.
We strongly recommend you use a contractor accountant to help you prepare your company's accounts, but ultimately, responsibility for ensuring these duties are carried out accurately and in good time, lies with you as the director.
Every limited company has a duty to keep accurate accounting records (whether or not they are trading), and to prepare annual accounts reporting on the activities of the company during the year. Your company's financial year runs from the day you incorporate.