What are a director’s responsibilities?

The first directors are appointed when the company is registered (form IN01) but others can be appointed later (form AP01) according to the company’s articles of association. New directors must confirm their full name, address, date of birth, nationality, country of residence, former names and business occupation. 

 

A service address as well as a home address can be filed at Companies House which, for the public record, could be the registered office of the company. 

 

Directors must give notice of any interests in contracts involving their company and directors of quoted public limited companies (PLCs) must declare the extent and nature of all their business interests. 

 

Directors are responsible for managing the company in line with the Companies Act and within restrictions in the articles of association concerning borrowing, for example. 

 

Generally, directors work together as a board although they can delegate powers to specific directors. 

 

Directors have some personal legal duties and, although the company is legally separate from them with its own legal requirements, directors must make sure it meets them. 

 

If you are a director you must: 

 

One of the main tasks for company directors is to prepare annual accounts and a financial report. The accounts must be a full and accurate record for each financial period and they must be presented to the shareholders and filed at Companies House. 

 

Directors can appoint a company secretary to make sure all their administrative duties are properly carried out. A private company doesn’t have to appoint one and the directors can carry out these duties themselves, but they could face penalties if they make a mistake. 

 

There are also regulations and legislation that directors should be aware of including: 

 

Insolvency Act – if a company becomes insolvent before it is liquidated and a director should have known that this would happen or they carried on doing business knowing that the debts couldn’t be paid they might have to contribute personally to the company’s assets. 

 

Company Directors’ Disqualification Act – company directors can be disqualified if they fail to make their annual returns three or more times in five years, if they are or have been a director of an insolvent company, or their conduct makes them unfit to be a director. 

 

Health and Safety at Work Act – employers and directors can be personally liable when health and safety responsibilities are breached. They can be fined or even sent to prison for gross negligence, along with being disqualified from company management. 

 

Corporate Manslaughter and Corporate Homicide Act – a gross breach of a director’s duty of care to employees or members of the public which causes death could result in unlimited fines and a requirement to publish details of the conviction and fine.