1. Directors’ responsibilities
As a director of a limited company, the law says you must:
- try to make the company a success, using your skills, experience and judgment
- follow the company’s rules, shown in its articles of association
- make decisions for the benefit of the company, not yourself
- tell other shareholders if you might personally benefit from a transaction the company makes
- keep company records and report changes to Companies House and HM Revenue and Customs (HMRC)
- make sure the company’s accounts are a ‘true and fair view’ of the business’ finances
- register for Self Assessment and send a personal Self Assessment tax return every year – unless it’s a non-profit making company and you don’t get any pay or benefits, like a company car
You can hire other people to manage some of these things day-to-day (eg an accountant) but you’re still legally responsible for your company’s records, accounts and performance.
You may be personally liable for your company’s business liabilities and be fined, prosecuted or disqualified as a company director if you don’t follow the rules. Contact your professional adviser or trade association to find out more.