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.
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
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.