A Guide to Being a Company Director in The UK
The following guide
is designed to help you understand the the role of a company
director for a UK limited company.
Can
anyone be a director?
What
responsibilities does a director have?
What
happens if accounts or annual returns are not filed?
Are
directors really prosecuted?
What
happens if accounts are delivered late?
Can
anyone be a director?
Generally it is up to the members (shareholder\owners) to appoint
the people they believe will run the company well on their behalf.
The only restrictions that prevent anyone becoming a director
are:
- the person must not
have been disqualified by a court from acting as a company director
(unless he or she has been given leave (permission) to act by
a court for a particular company);
- the person must not
be an undischarged bankrupt (except with leave of the court);
- in Scotland only, anybody
under the age of 16;
You do not have to
be a UK resident or National to be a director of a UK limited
company.
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What
responsibilities does a director have?
A company director is ultimately responsible for managing the
company and ensuring it remains legal and solvent. Directors
are appointed by the company shareholders to run the company
on behalf of its owners.
Every company director
has a personal responsibility to ensure that statutory documents
are delivered to the Registrar as and when required by the Companies
Act. In particular, financial accounts, annual returns, notice
of change of directors or secretaries or in their particulars
and notice of change of registered office.
Many of these tasks
are often completed by the company secretary but it remains
the directors responsibility to ensure this happens.
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What happens if accounts or annual
returns are not filed?
All the directors of the company could be prosecuted. Failure
to deliver documents on time is a criminal offence. On conviction,
a director could end up with a criminal record and a fine of
up to £5,000 for each offence.
Alternatively, if the Registrar believes that the company is
no longer carrying on business or in operation, he could strike
it off the register and dissolve it. If this happens all the
assets of the company, including its bank account and property,
generally become the property of the Crown.
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Are directors really prosecuted?
Yes. Occasionally directors are prosecuted for failing to deliver
accounts and returns to the Registrar on time. This is usually
the result of persistent failure to deliver statutory documents
on time and may also lead to a director being disqualified from
taking part in the management of a company, for a specified
period.
Companies House are
very good at notifying a company of its deadlines at regular
intervals so it would be careless to miss a deadline. If you
are unfortunate enough to miss a deadline it is best to communicate
with Companies House to resolve the problem quickly and amicably
before legal proceedings are instigated.
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What happens if accounts are delivered
late?
As a director of a private limited company, you normally have
a maximum of 10 months from the accounting reference date in
which to deliver your company's accounts to the Registrar. The
accounting reference date is the date to which your accounts
must be prepared.
If accounts are received late, the company will automatically
be charged a 'late filing penalty'. The late filing penalty
will be calculated according to the length of delay.
For further information
follow this link – financial
aspects of a limited company
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