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Understanding Your Duties and Responsibilities as a Company Director
Posted by
CraigDBarnes
,
15 February 2013
·
1,576 views
Business
Being a company director leads to generous rewards but there are also duties and responsibilities. You will be responsible for the whole company and it will be up to you to make sure that is runs legally and is financially stable. Be aware of the responsibilities and duties as a director before you accept the position, whether you are being appointed to the board or going to start running your own company.
Act in the Interest of Your Company
Your main duty is to act in the interest of the company – not the shareholders, the board of directors or investors. It is up to you to make sure that your company remains financially stable so any decisions need to be made with the company in mind. One option may be excellent for the shareholders and they may try to pressure you into taking it, but consider how it will work for the company, whether it will lose money or if it works out mutually beneficial.
The same applies for your own interests or the interest of your family. You cannot put your interests above the company’s, even if taking the position was for the business lifestyle more than anything else.
A Duty to Promote the Company’s Success
Your actions need to promote the company so that it succeeds. Before you do anything, you have a responsibility to think about how your actions will look should others find out about the decision. You need to think about how the media, potential customers and investors will picture the company after a decision has been made.
This can be difficult because while thinking of this, you need to consider the long-term benefits and consequences of your actions, the employees’ interests, the building of relationships with customers and suppliers and your impact within the environment and community.
A Duty to Declare Tax, Earnings and Accounts
As the company director, it will be your responsibility to make sure that all accounts are up to date and all legal requirements are declared. You can hire a secretary and accountant to help with this and delegate the responsibility but you will still have some to make sure that it is completed correctly. If you hire someone else, you will need to have proof that you did as much as possible to ensure that you were acting legally and all accounts and filings were up to date.
This also involves declaring financial problems. As soon as you know that your finances will not meet your outgoings and that there is nothing you can do to save the business, you need to start the insolvency process. This will protect you against fraud so that you are not personally liable.
There are many duties and responsibilities for company directors, including the ones listed above.. Make sure you know them and can meet them before accepting a position. You can benefit considerably as a director but there are consequences for not acting as a director should, whether it is in the interest of yourself or someone else.
Author bio:
Alex has written many articles for RealBusinessRescue. She has written on many business topics, including HMRC, starting a business and the duties involved when becoming a company director. Real Business Rescue helps company directors who are facing financial distress and may need to understand the options of restructuring there business.
Act in the Interest of Your Company
Your main duty is to act in the interest of the company – not the shareholders, the board of directors or investors. It is up to you to make sure that your company remains financially stable so any decisions need to be made with the company in mind. One option may be excellent for the shareholders and they may try to pressure you into taking it, but consider how it will work for the company, whether it will lose money or if it works out mutually beneficial.
The same applies for your own interests or the interest of your family. You cannot put your interests above the company’s, even if taking the position was for the business lifestyle more than anything else.
A Duty to Promote the Company’s Success
Your actions need to promote the company so that it succeeds. Before you do anything, you have a responsibility to think about how your actions will look should others find out about the decision. You need to think about how the media, potential customers and investors will picture the company after a decision has been made.
This can be difficult because while thinking of this, you need to consider the long-term benefits and consequences of your actions, the employees’ interests, the building of relationships with customers and suppliers and your impact within the environment and community.
A Duty to Declare Tax, Earnings and Accounts
As the company director, it will be your responsibility to make sure that all accounts are up to date and all legal requirements are declared. You can hire a secretary and accountant to help with this and delegate the responsibility but you will still have some to make sure that it is completed correctly. If you hire someone else, you will need to have proof that you did as much as possible to ensure that you were acting legally and all accounts and filings were up to date.
This also involves declaring financial problems. As soon as you know that your finances will not meet your outgoings and that there is nothing you can do to save the business, you need to start the insolvency process. This will protect you against fraud so that you are not personally liable.
There are many duties and responsibilities for company directors, including the ones listed above.. Make sure you know them and can meet them before accepting a position. You can benefit considerably as a director but there are consequences for not acting as a director should, whether it is in the interest of yourself or someone else.
Author bio:
Alex has written many articles for RealBusinessRescue. She has written on many business topics, including HMRC, starting a business and the duties involved when becoming a company director. Real Business Rescue helps company directors who are facing financial distress and may need to understand the options of restructuring there business.
