Company directors are the head honchos, the big wigs, the guys and gals that run the company and see it through thick and thin, building profits and making sure the organization runs smoothly. But what do you really know about directors? How much do you know about their legal and tax obligations, anyways?
If you are looking to start a company, or you already are the director of a small business of some type, it’s important to understand exactly what you are getting yourself into through your directorship. In fact, there are several rules that current and future directors must be made aware:
Eligibility Requirements
First and foremost, company directors must be over the age of 16 years old. They must not have been disqualified from acting as a company director, and they cannot be in bankruptcy themselves, unless given special permission by a court to go through bankruptcy proceedings while directing an organization. Obviously, too, they must not be restrained from being a director in any way or by any other UK government restrictions.
Appointed by the Company
Typically, directors are appointed by the company’s shareholders as employees who are in charge of overseeing the company and working on its behalf. It is up to the owners and shareholders of a company to appoint this director and ensure that they will do well for the benefit of the company. Director’s positions are public knowledge, too; they will be listed on the Internet as the director of a particular company and will have the knowledge made aware to anyone seeking to search.
Responsibilities and Risks
While directors themselves are not personally liable for a company’s debts (the company as a whole is, instead), it is nevertheless on the responsibility of the director to ensure that their company information is received by the Registrar of the Companies House for things like annual accounts and returns. In addition, directors are answerable to shareholders and responsible for things like the treatment, health and safety of employees. While not responsible for company debts, directors are nevertheless prosecuted should criminal offences take place if company returns are not filed, or filed incorrectly.
Work On Behalf of your Company
As the head (and often times most visible) employee of a particular company, it is a director’s job to work in such a way that will most likely promote the success of the company for the benefit of the shareholders. As such, any director must have in their mind the interests of the stakeholders and the community, as well as the company’s profit margin and overall reputation.
It is not easy being a company director, especially with larger businesses and organizations, but doing so provides great potential not only for income and rewards, but for growing a company on a local and national stage, and making products and services that people need and use every day. Be diligent and well-informed about your company’s affairs, and stay on top of accounting and financial rules, and you could be a very successful director, too!
