04 Dec
Do you know your responsibilities as a Director?

So you're a company Director?  Do you know what your responsibilities are?

Separate Legal Entity

It is important to be clear that you and the company are separate legal entities.

If you were previously self-employed then you will have to make some significant mental adjustments, for example:

You can no longer just withdraw money from the business without thinking about how you are going to treat it and being aware if the implications.
The legal issues are different so, for instance, starting and closing a company is more complex and there are tax and accounting issues to consider at these points

Financial Responsibilities

You have to produce accounts that will be more complex than you may be used to producing as a sole trader (depending on the size of the business).

You have a legal responsibility to:

Keep good accounting records from which accounts can be prepared which give a true and fair representation of the financial position of the company
Produce accurate accounts, filed at the due time with Companies House
Submit corporation tax returns to HMRC and pay any tax due
Deal properly with the payment of staff, deducting tax and national insurance as appropriate and paying it to HMRC by the due date
Trade solvently, ensuring that you are able to pay the liabilities of the business. To fail to do this is to commit an offence.

Legal Responsibilties

Apart from the financial responsibilities mentioned above, there are other legal responsibilities for the director, such as:

Completing and returning the annual return (form 363)
Acting in the interests of the company shareholders. This means that the directors cannot enrich themselves in a way that damages the company.

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