A company director has an important role in a business and many responsibilities; as such, becoming a company director should not be done lightly. A prospective company director should only take on the role with a sound knowledge of what is to be expected of them, the nature and health of the business, and any liabilities they might incur on taking on the role. Let’s take a look at the role of the company director and the duties they are expected to perform.
Legal responsibilities
Company directors are responsible for the safe and compliant running of a company and for filing accounts with Companies House in a timely way. A company director is responsible for making sure the data held by Companies House is correct and for registering things such as changes in the company officers, the registered address, and other financial information.
Many company directors will not do the administration of these duties. They may hire an accountant to prepare their accounts, for example, but the company director is ultimately responsible for the accuracy of these duties and will need to check the details carefully before signing them off.
Company liabilities
A director guarantee is an option for a business to access financing that it would otherwise not be able to access; however, taking on a personal guarantee comes with risks and may lead to loss of personal property. Legal advice should always be sought from a reputable firm such as www.parachutelaw.co.uk/director-guarantee.
In these difficult economic times, company insolvencies are increasing; therefore, the likelihood of default and insolvency should feature heavily in this decision.
It is also important to note that when resigning from a company, a director is not freed from any personal director guarantee they have provided.