UK and Ireland Company Director Reports Instantly Available Online

Company Directors United Kingdom (UK) & Republic of Ireland (ROI)

In most small to medium sized companies a director or directors are also the shareholders, the one(s) who own and run the company, many directors own and operate more than one company and in the UK there is no restriction on how many directorships a person can have. However in the ROI directors are restricted to 25 directorships at any one time (public and companies within the same group are not totalled for this limitation).

Larger Companies and PLC’s (Public Limited Companies) are owned by the Shareholders and normally operated by employed Directors. All UK limited companies must have at least one director and up until April 2008 every limited company was also required to have a Company Secretary. In the Republic of Ireland each company must have 2 directors, 1 of which must be an Irish resident.

Company Directors United Kingdom (UK) & Republic of Ireland (ROI)

In most small to medium sized companies a director or directors are also the shareholders, the one(s) who own and run the company, many directors own and operate more than one company and in the UK there is no restriction on how many directorships a person can have. However in the ROI directors are restricted to 25 directorships at any one time (public and companies within the same group are not totalled for this limitation).

Larger Companies and PLC’s (Public Limited Companies) are owned by the Shareholders and normally operated by employed Directors. All UK limited companies must have at least one director and up until April 2008 every limited company was also required to have a Company Secretary. In the Republic of Ireland each company must have 2 directors, 1 of which must be an Irish resident.

Directors have many business responsibilities for ensuring the success of their company and keeping within all relevant laws in areas such as health and safety, employment law, taxation and Company Law.

Limited Company Directors run the risk of serious penalties if they don't ensure that key information is filed either at Companies House (UK) and the Companies Records Office (ROI) within the specified time allowed and ensure that the company produces and files its annual accounts, other filing requirements are changes to director information and annual returns.

Until recently the role and responsibilities of UK company directors was defined by case law. Now the Companies Act 2006 confirms existing case law and requires company directors to act in a way which is most likely to promote the success of the business.

What UK Company Directors are responsible for under company law.

Appointing new directors

Every limited company must have at least one director. If a limited company only has one director, that director must be an actual person - as opposed to another company. A public limited company or plc must have at least two directors.

In general, it's up to shareholders to appoint whom they want as director. But there are restrictions on candidates, namely:

Directors must not have been disqualified by a court from being a director - if they have; they need the court's permission. They must not be an undischarged bankrupt - if they are, they need the court's permission and they must not be under the age of 16.

The appointment of directors must also comply with the company's Articles of Association. These set out rules for how the company is to be run.

They may include, for example:

• How many directors there should be
• How long they can serve
• What happens at the end of their term

For example, in many companies directors are required to retire after a set term - say three years. They can offer themselves for re-election at the shareholders' annual general meeting.

A director may be involved in the day-to-day management, but doesn't have to be, non-executive directors still have the same legal responsibilities as other directors.

Companies House MUST be notified within 14 days when:

• A new director or secretary is appointed - using form 288a
• A new director or secretary resigns - using form 288b
• There is a change in a director's or secretary’s details - name or address, for instance - using form 288c
  

Directors' powers and financial liabilities

Directors must exercise a degree of skill and care. They must:

• Show the skill expected of a person with your knowledge and experience
• Act as a reasonable person would do looking after their own business
  

They must act in good faith in the interests of the company as a whole. This includes:

• Treating all shareholders equally
• Avoiding conflicts of interest
• Declaring any conflicts of interest
• Not making personal profits at the company's expense
• Not accepting benefits from third parties

They must obey the law:

• Company law requires them to produce proper accounts and send various documents to Companies House
• Other laws include areas such as health and safety, employment law and tax
• They may be responsible for the actions of company employees

Directors if in doubt should take professional advice. Acting improperly can lead to fines, disqualification from being a director, personal liability for the company's debts or a criminal conviction.

Directors have other legal duties besides those relating to Companies House.

For example, they must comply with employment law in all dealings with employees or they may be found personally liable for unfair dismissal, racial or sexual discrimination or unfair work practices. They should also ensure that the company complies with all employment law changes.

There are also health and safety responsibilities that they must follow. They must ensure that they carry out a risk assessment and put a health and safety policy in place. If a company employ more than five people a health and safety policy must be in writing. You can read guidance on directors' responsibilities for health and safety on the Health and Safety Executive (HSE) website - Opens in a new window. (http://www.hse.gov.uk/)

Company directors also have a responsibility to check that the correct amount of tax, VAT and National Insurance are paid and on time, failure to carry out some of these duties, such as where health and safety is concerned, can result in a criminal conviction.

Disqualification of directors

Potential causes of disqualification include:

• Allowing the company to trade while insolvent
• Not keeping proper accounting records
• Failing to prepare and file accounts
• Not sending returns to Companies House
• Failing to send tax returns and pay tax

In some cases, you could also face criminal charges, fines or being made personally liable for the company's debts.

Disqualification proceedings are handled by the courts or the Insolvency Service. If they find against you, you'll be disqualified for between two and 15 years.

While disqualified, you must not:

• Be a director of any company
• Act like a director - even without being formally appointed
• Influence the running of a company through the directors
• Be involved in the formation of a new company
• Act in a way that promotes a company

Ignoring a disqualification order is a criminal offence. You could be fined and sent to prison for up to two years.

Even if you have not been disqualified, rules introduced on 6 August 2007 may prevent you from becoming a director of another company. The rules prohibit directors of insolvent companies from becoming the director of another company with the same or a similar name (known as a 'prohibited name') for 12 months. The rules also prohibit directors of insolvent companies from acting in a way to promote, form or manage a company with a prohibited name.

Sending documents to Companies House

Company law makes a director responsible for sending various statutory returns to Companies House.

Even though companies may delegate these tasks to other organisations or individuals, e.g. the company secretary, the director is still responsible for filing documents at Companies House.

UK Late Filing Penalties

Source: Companies House
http://www.companieshouse.gov.uk/companiesAct/ca_lateFilingPenalties.shtml

The responsibilities of UK and ROI directors are quite similar regarding their compliance with the company laws of their respective countries.