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Responsibilities of a limited company director

As a director of a limited company, you must:

  • Follow the company’s rules, as shown in its articles of association

  • Keep company records and report changes

  • File your accounts and your Company Tax Return

  • Tell other shareholders if you might personally benefit from a transaction the company makes

  • Pay Corporation Tax

  • Register for Self Assessment and send a personal tax return to HMRC every year (does not apply if your company is a non-profit organisation, such as a charity, and you didn’t get any pay or benefits).

You may 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. You may be fined, prosecuted, or disqualified if you don’t meet your responsibilities as a director.

Certain people are prohibited from acting as a director of a company, including persons under 16 years of age, bankrupts, and disqualified persons. While there is no mandatory qualification required to be a director, a director is required to perform the duties outlined above and must be capable of doing so.

As a director, you must make decisions for the benefit of the company and not yourself. This may seem confusing if you are the sole shareholder, employee, and director, but a decision that may benefit you personally may adversely affect the company’s performance.

 

Last Updated: 09 Oct 2019 09:35AM BST
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