Limited Company Director Obligations

In a Nutshell

It's the Law

In a Sentence

A company director has certain legal obligations which are mandatory, you cannot pick and choose what you'll do - you do them all.

Running your own limited company means that there are certain tasks you have to do, they're not optional. You, the company director, have both legal and financial obligations to the state under penalty for inaction.

The Law

UK company law says a company director has to return a completed Annual Return (AR01), let Companies House know if there are changes to the details of a Director or Secretary or registered address and act in the interests of the company's shareholders.

As a contractor running your own limited company all these rules and some more, apply to you. It may seem a bit daunting at the beginning but that's where a good contractor accountant comes into the picture.

Finance

Company directors cannot profit at the expense of shareholders and there are several accounting tasks that have to be completed.

• CT600: Complete a Corporation Tax return and pay the company's tax.
• Payroll directors and/or staff under PAYE where applicable.
• Complete company accounts each year.
• Be able to pay the company's bills.

Magnificent Seven

Companies Act 2006 lays out seven areas that a company director has to take responsibility for. These duties are:

1. Act within your powers as a company director
2. Promote the success of your company
3. Exercise independent judgement
4. Exercise reasonable care, skill & diligence
5. Avoid conflicts of interest
6. Not to accept benefits from third parties
7. Declare interest in proposed transactions or arrangements with the company

Worry Not

It's not that easy being a company director, using the services of an umbrella company is a breeze by comparison. But don't be put off just because of the back-office administration.

Specialist contractor accountants are in business specifically to provide a professional service to contractors running their own limited