Responsibilities of the Director of a Limited Company.
What differentiates a company from a business is the fact that a business is a separate legal entity. Unlike a business, the profits and liabilities of a company are not shared by the directors of the company. Bearing that in mind, there are a number of responsibilities that a director owes to a company. Here is an account of some of them:
Keeping Insolvency Away
The most primary responsibility of the director of any company is to make the company profitable. However, when the director fails to meet this obligation for an extended period of time, there’s a risk of the company ending up insolvent. A company is said to be insolvent if it is unable to raise enough assets for sustaining its liabilities, obligations and operations.
Protecting Company’s Funds
Another responsibility of a director is to protect the company’s assets and funds, not only from others but from themselves as well. Directors have got the hot seats when it comes to the operations of companies, so there’s a fair chance that they might be the ones causing harm to the company’s funds, assets and wellbeing.
Filing of Accounts
Companies—especially the public ones—have a need for their annual accounts to be filed. It is, therefore, the duty of the directors to ensure that the companies’ accounts are filed on a timely basis. They need to ensure, also, that the accounts are free of all kinds of material misstatements.
It is the responsibility of the director to clear all of the tax dues, on behalf of the company. Corporation tax is different from their personal tax, which means that they not only have to pay tax on their earnings but on the earnings of the company as well.
When you take it all into perspective, you realise that the success of a company is directly dependent upon how well its directors fulfil their responsibilities.