1. Legal Framework and Statutory Duties
Every director is bound by the Companies House Act 2006 which details the seven statutory duties of directors:
- Act within powers
- Promote the success of the company
- Exercise independent judgment
- Exercise reasonable care, skill, and diligence
- Avoid conflicts of interest
- Not accept benefits from third parties
- Declare interest in proposed transactions or arrangements
2. Role and Responsibilities
As a director of a limited company, you will be a responsible for wearing several hats! Just doing the work is just one of your new roles. You will also be
a) Strategic direction and decision-making
b) Financial oversight and approval of annual accounts
c) Ensuring adequate resources and systems are in place
d) Compliance with legal and regulatory requirements
e) Risk management and internal controls
3. Compliance Requirements
Annual accounts and reports
- Deadline for filing with Companies House:
- Private limited companies: 9 months after the company's financial year ends
- Public limited companies: 6 months after the company's financial year ends
Confirmation Statement (formerly Annual Return)
- Must be filed at least once every 12 months
- Due date is on the anniversary of incorporation or the anniversary of the last Confirmation Statement
4. Tax Compliance
Corporation Tax
- Filing deadlines:
· File Company Tax Return within 12 months after the end of the accounting period it covers
· Pay Corporation Tax within 9 months and 1 day after the end of the accounting period
· Maintaining proper records for at least 6 years
VAT (if registered)
- Registration thresholds (as of 2024/25 tax year):
· Mandatory registration: When VAT taxable turnover exceeds £90,000 in a 12-month period
· Deregistration threshold: £83,000
Filing and payment deadlines:
· Quarterly VAT returns: Submit and pay within 1 month and 7 days after the end of each quarter
· Monthly VAT returns: Submit and pay within 1 month and 7 days after the end of each month
· Annual VAT returns: Submit and pay within 2 months after the end of the annual accounting period
5. Employment Law Compliance
As a director of a limited company, you are responsible for ensuring the company is in keeping with all relevant employment laws. We have several HR and health and safety specialists who we work with to help ensure you know where to get the best advice.
a. Employment contracts and policies
b. Health and safety regulations
c. Equality and diversity considerations
6. Data Protection and Privacy
a. General Data Protection Regulation (GDPR) compliance
b. Appointing a Data Protection Officer (if required)
c. Data breach reporting obligations
7. Consequences of Non-Compliance
Directors may face personal liability despite a company's separate legal status. This can occur when directors breach their duties or engage in illegal activities. In some cases, violating company law could result in criminal charges for both the company and any directors involved in the breach.
Regulatory fines can also extend to directors. For instance, the Privacy and Electronic Communications Regulations of 2003 permit fining directors for marketing rule infractions.
Failure to fulfill legal obligations can lead to directorship bans or disqualifications.
Examples of conduct deemed unfit include:
- Allowing insolvent trading
- Neglecting proper accounting practices
- Failing to submit required documents to Companies House
- Evading company tax obligations
- Misappropriating company resources for personal use
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