The Duties of Directors

You’ve just formed your new company and have appointed yourself as a director. But what does it really mean to be a director? What is expected from you and what are your legal responsibilities? In this article, we explore what is generally expected from a director and what your statutory obligations are, because it is not a role that should be accepted lightly

What does a director do?

The directors are generally responsible for determining the company’s strategy, monitoring the company’s progress and reporting on the company’s activities to the relevant parties, such as share holders. In larger organisation, they’ll also be responsible for appointing senior members of staff.


The directors are generally responsible for the management of the company and they may exercise all the powers of the company. However, the extent of their authority may be restricted by the Companies Act 2006 and the Articles of Association. The Articles of Association define the rules governing how the company is to be run; including what the directors’ powers and responsibilities are.

What are the Director’s Duties to the Company?

When you are appointed a director of a company you become an officer with extensive legal responsibilities. For a director of an incorporated body, the Companies Act 2006 sets out a statement of your general duties.

The Act outlines seven statutory directors' duties:

  • to act within their powers
  • to promote the success of the company for the benefit of its members
  • to exercise independent judgement
  • to exercise reasonable care, skill and diligence
  • to avoid conflicts of interest
  • not to accept benefits from third parties
  • to declare an interest in a proposed transaction or arrangement

Essentially, the legislation requires that directors act in the interests of their company and not in the interests of any other parties (including shareholders). So even if you’re the only director and own all of the shares, you must still consider the implications of not putting your own interests above those of the company.

Reporting to Companies House

Every company director has a personal responsibility to deliver statutory documents to Companies House as and when required. These include, in particular:

  • accounts;
  • annual returns; and
  • notice of change of directors or secretaries or in their personal details
  • It is also the responsibility of the directors to ensure that the company maintains full and accurate accounting records.

    Although the director’s are technically personally responsible for delivering this information to Companies House, there is no reason why they cannot delegate these tasks to say, their accountant.

    Other responsibilities

    In addition to the statutory duties, directors are also subject to a wide range of other legislation such as:

    • the Insolvency Act 1986;
    • the Company Directors’ Disqualification Act 1986;
    • the Health and Safety at Work etc Act 1974; and
    • the Corporate Manslaughter and Corporate Homicide Act 2007
      • Non-compliance

        Contrary to popular belief, directors may incur personal liability; both civil and criminal, for some offences. Even failure to file the accounts or annual return to Companies House is a criminal offence and can lead to prosecution and a fine of up to £5,000; in addition to any late filing penalties

        We can help

        If you would like to concentrate on running the business, we can assist you with complying with your duties as a director. In addition, we can provide you with the following services:

        • Report to Companies House on your behalf, including the preparation of the company accounts and tax return, and advising you of any corporation tax liability due
        • Company secretarial services, such as maintaining the statutory registers, filing statutory information with Companies House and providing members and directors with notice of meetings
        • Bookkeeping services including sourcing a bookkeeping product to suit your needs
        • Payroll services
        • Tax planning advice; for the company and you personally- including the preparation of your personal tax return

        Contact us today to find out more about our services for limited companies and how they can benefit your business on 0800 0523 555

        By Jo Nockels
        Last updated November 2013

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