Duties of a Limited Company Director
Every limited company registered with Companies House is required to have a director; the director is automatically given responsibilities from Companies House to ensure that the running of the business is done according to regulations. If there is no director at any time, such as the death of the sole director, then a new director must be appointed as agreed upon by the shareholders. Professionals such as accountants can be hired to help these responsibilities to be met, but they remain the directorâ€™s responsibility.
The responsibilities of the director are as follows:
â€¢ To follow the company rules from the document
â€¢ To ensure bookkeeping and company records are up to date. If records are destroyed, Companies House and your Corporation Tax office must be informed as soon as possible.
â€¢ To report any changes of records to Companies House
â€¢ File your company accounts to Companies House and company tax return to HMRC
â€¢ To pay any corporation tax that is due
â€¢ To inform shareholders of any personal benefits you receive from a business transaction
Failure to comply with these responsibilities can incur fines and penalties, or even disqualification from directorship. Changes can be made online with Companies House or by sending in paper forms to them.
The changes that need to be reported to Companies House would be details on the company, directors, secretary and shareholders such as registered or home addresses, change of names or genders, changes to people with significant control of the company or changes to the address records are kept. You will also need to inform Companies House if you appoint an advisor or accountant. Changes to the company name or the removal of a director must be approved by the shareholders before the change can happen, and then Companies House must approve the name change before the company can begin using it.
A person who has significant control in the business is a shareholder with 25% or more of the shares, can influence decisions your company comes to and can remove or appoint directors.
There are regulations that should be followed in the day to day running of the company that are not responsibilities of the director but are required.
If dividends are declared, documents must be prepared for each shareholder. These documents show how many shares that shareholder owns in the company, the company name and the shareholderâ€™s name, the date the dividends were paid and the total value of dividends the shareholder received. These documents are referred to as â€˜dividend vouchersâ€™.
A company must also submit a confirmation statement each year to Companies House. The confirmation statement confirms the shareholders of the company, and people with significant control, the companyâ€™s SIC which explains what type of products or service the business provides, and the registered address and information of the directors and secretary. A confirmation statement costs Â£13 to submit the information online, or Â£40 if you need to send it in by post.
Failure to send in the confirmation statement can lead to a fine and your company being struck off the register. Tags:
business set up, director roles, limited company