The role of a limited company director centres around the lawful and effective management of a company and its activities, making important decisions on behalf and for the benefit of the business and its members. In this blog, we take a brief look at this role and the key responsibilities involved.
The role of a limited company director
There are two distinct bodies of people in a limited company. The members (shareholders/guarantors) who own and control the company; and the directors who manage the activities and finances of the business on a day-to-day basis.
Directors are chosen and appointed at the discretion of company members. In many cases, directors and members are the same people. This is commonplace in smaller companies, particularly those which are set up by one or two people who want to own, control, and manage a business by themselves.
The role of a limited company director is to make the business a success for its members. This involves making strategic and operational decisions, managing finances responsibly, and ensuring that all statutory obligations are met.
The responsibilities of a limited company director
Under the Companies Act 2006 (sections 171 to 177), a limited company director has a legal duty to:
- Act within their powers, as prescribed by the company’s constitution
- Promote the success of the company
- Exercise independent judgment
- Exercise reasonable care, skill, and diligence
- Avoid conflicts of interest
- Not accept benefits from third particles
- Declare interests in existing or proposed transactions or arrangements
In addition to these general statutory duties, a limited company director is responsible for overseeing all filing and reporting obligations of the business.
This includes the preparation and filing of annual accounts and tax returns, completing annual confirmation statements, paying business taxes, maintaining the company’s statutory books, and notifying Companies House when key company details change.
Can anyone be a limited company director?
Almost anyone can be a limited company director, with the exception of people below the age of 16, people who are subject to the restrictions of a bankruptcy order or Debt Relief Order, and disqualified directors who are currently banned from acting in such capacity for a specific period of time.
So there you have it – a brief introduction to the role and responsibilities of a limited company director. If you have any questions, please leave them in the comment section below and we will get back to you shortly.