What are The Responsibilities of Company Directors?

Whether you are contracting for your own limited company or you are appointed as the director for someone else’s company, there are certain duties that you are required by law to perform as director. If you own a limited company and are appointing a director, you should also understand these responsibilities to ensure that your company remains compliant with the current rules and regulations surrounding limited companies.

Confident company director

Company directors’ responsibilities

Director’s functions

The Companies Act 2006 set forth the current duties and obligations of limited company directors. There are a total of seven major functions that the director must perform. These include promoting the company, exercising independent judgement in the operation of that company, using reasonable care and skill when performing company duties, avoiding any conflicts of interest within the company, and declaring any interests in proposed transactions. In addition, the director must never accept benefits of any form from outside parties.

Tax and accounting

Most directors who form limited companies will hire the services of a professional accountant for financial duties. However, directors also have a function with regards to tax and accounting obligations. It is the duty of the company director to ensure that all of the company’s accountancy tasks are accurately and properly completed. The director must ensure that these tasks are completed in a timely manner.

The director is tasked with making certain that all accounting records are accurate. He or she is responsible for submitting these company annual accounts to Companies House before the required deadline. The director is also responsible for submitting the Corporation Tax Return every year and for settling any outstanding tax liabilities that may be due to HMRC.

Employee remunerations

Company directors are responsible for ensuring that all employees are paid correctly and for accounting for any and all income tax and NIC deductions. A director should trade solvently at all times and only declare dividends when a profit is readily available in the company to be distributed legitimately.

Legal and statutory

Directors also have a number of legal or statutory duties that must be met. Companies House requires that all limited companies submit a confirmation statement every year. This is the responsibility of the company director. The director must also inform Companies House if any company details change throughout the year. This includes any changes to names, address, or share capital. These changes must be submitted to Companies House within a reasonable time after the change has occurred.

It is the director’s sole responsibility to ensure that the company follows all laws and regulations regarding employees, health and safety and individual company laws and policies. Directors should act in the best interests of the company shareholders and never enrich themselves if this enrichment is detrimental to the company.

Other duties

Depending on the company and the company’s own policies, company directors may be tasked with other duties as well. If a company has more than one director, these tasks can be delegated so that each director is in charge of a certain task, provided all of the requirements are met by at least one director and these individual duties should be spelled out in the company bylaws.


Due to the vast array of duties and obligations, only the qualified ones who can be effective company directors.  Hone your skills and earn your experience well, and you’ll be ready!


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