Guide to a Director’s Responsibilities
What is a Director?
Directors act as the managers of a company and make the daily decisions in managing a company’s operations. On becoming a director, you are responsible for certain legal obligations.
What is a Shareholder?
The shareholders are the owners of the company whereas the directors are employees of the company.
The percentage of shareholdings determines the ownership in the company.
Who can be a company director?
A director must be 16 years old, not be declared as a bankrupt and can’t be prohibited to act as a director by a court order.
What are a directors duties?
- Your duty to the company is the underlying legal principle to uphold. It means the interests of the company are paramount, above that of the shareholders, the directors, or any other interested parties.
- To run the company in accordance with the law and the rules laid out in the Articles of Association of the company.
- To notify your shareholders if you have a potential conflict of interest.
- You have a duty to keep an accurate record of the company’s accounts which reflects its financial position and retaining the company’s accounting records for 6 years after the year end date.
- You are also responsible for ensuring that the company is not wrongfully trading or taking illegal dividends.
- Keep the company’s records and report any changes to Companies House and HMRC, such as registered address, and the addresses of shareholders.
- Register and file Self Assessment tax returns for the directors.
Tax filing and return dates?
As a director, you need to ensure that the company is registered for the relevant taxes and that any returns are submitted correctly to HMRC and Companies House within the statutory deadlines.
The following is a list of returns and registrations that directors are responsible for:
- Registering for Corporation Tax and setting up a PAYE scheme with HMRC.
- Managing the PAYE scheme and sending RTI submissions to HMRC before paying employees their salaries.
- Registering and account for Vat if the company’s turnover is in excess of the VAT threshold over a 12 month period.
- Filing your company’s annual financial statements to Companies House within 9 months of the company’s Year end date.
- Filing your company’s annual financial statements and Corporation Tax return (CT600) within 12 months of the company’s Year end date.
- Paying Corporation Tax within 9 months and 1 day after the accounting year end.
- Submitting the company’s Confirmation Statement by the due date each year.
HMRC & Companies House take a director’s responsibilities seriously. You can be held personally liable and fined and/or disqualified as a company director if you don’t uphold your duties.