5 things directors need to know

These points cover the most important things directors should know. Read this list to make sure you’re on track, whether you’re a new or experienced director. 

1. Directors' responsibilities 

Know your responsibilities; authorities can fine, prosecute and disqualify you if you fail to meet them. 

• Running the company 
• Keep company records 
• File accounts and tax return annually 
• Pay taxes 
• Confirmation statement filed annually 
• Report changes to Companies House 

2. Directors' duties 

Be aware of your duties, these are a guide to what being a company director should involve: 

• Follow company rules as set out in articles of association 
• Act in bets interests of the company 
• Don’t allow other people to control your actions 
• Avoid conflicts of interest 
• Don’t accept benefits from a third party 
• Tell other directors and members if you might personally benefit from a transaction 
• Don’t misuse company’s property 
• Be confidential about the company’s affairs 

3. Profit extraction 

As a director you can take money out of a company as a salary, expense claim or benefit. Directors should not take drawings in the same way that a sole trader can. A director, who is also a shareholder, can receive a dividend. 

Taking money from a company that is neither salary or dividend is a directors’ loan. Complex rules are in place for directors’ loans and it’s important to speak to your accountant if you have a directors’ loan. 

4. Company register details 

Public and private registers record director and shareholder details, these include: 

• Name 
• Nationality 
• Occupation 
• Month and year of your date of birth (private register) 
• Correspondence/service address (public register) 
• Home/residential address (private register) 

Speak to your accountant about using a service address to protect your personal information. 

5. Self-assessment obligations 

Directors don't need to register for self-assessment or file a tax return unless they have other reasons to do so. Directors who have untaxed earnings, and/or taxable income above £100,000 may need to register for self-assessment. The deadline for self-assessment registration is 5th October after the end of the tax year. Speak to an accountant to make sure you meet your commitments. 

How TaxAssist Accountants can help 

TaxAssist Accountants are here to help you and your business thrive. We specialise in accounts and tax for limited companies and directors. Give TaxAssist Accountants a call today on ::telephone or use our contact form and we'll be in touch. 

Date published 11 Dec 2023

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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