Limited company directors: duties and responsibilities explained

Becoming a director of a limited company is a big step. It can be rewarding, but it also brings responsibilities you might not have faced before. Alongside running your business day to day, you’ll need to keep on top of the company’s paperwork and make sure you’re meeting Companies House and HMRC rules.

In this guide, we explain what being a director involves, the duties you must comply with, and how an accountant can make life a lot easier.

What is a company director?

All UK limited companies must have at least one director. Before the implementation of the Companies Act 2006, companies were also required to appoint a company secretary; however, this is no longer mandatory for standard private companies (although public limited companies still need a secretary).

The initial director(s) is/are appointed during company formation. Thereafter, company officers can be changed by notifying Companies House, the registrar of companies. Today, most of this is done online via WebFiling.

Who can be a company director?

Anyone can be a director, as long as they are:

• Over 16 years old (the minimum set under section 159A of the Companies Act 2006). Some companies formed before 2006 had to change directors under transitional provisions.
• Not an undischarged bankrupt.
• Not disqualified from acting as a company director (e.g. by a court order or regulatory disqualification).
• Not the company’s appointed auditor.

You do not need to own shares to be a director. In practice, many limited company contractors are sole directors, or co-directors (for example, with a spouse as the second director).

However, even if you are the sole director, you must still fulfil all duties and legal obligations.

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Find out more in our guide to who can become a director.

Appointing and terminating a director

Appointment

• A new director is appointed by a resolution of the company’s existing directors or shareholders, as specified in the company’s Articles of Association.
• The appointment must be registered with Companies House (usually via form AP01) and the public register updated.
• From 18 November 2025, any new director must also complete a formal identity check before Companies House can accept the appointment. See our guide to mandatory identity checks for company directors for complete details.
• The company must update its internal records and registers (directors’ register, statutory books) and notify HMRC if necessary.

Resignation, removal, or termination

• A director may resign by providing written notice (as per the company’s Articles).
• Directors can also be removed by an ordinary resolution of shareholders (commonly using form TM01 to notify Companies House).
• If a director becomes disqualified, bankrupt, or unable to act, removal must also be processed properly.
• The company must update its register of directors and notify Companies House of the termination or removal.
• Even after leaving, a former director can remain liable for any misconduct or wrongful trading that occurred while they were in office.

What are my practical responsibilities as a director?

Directors must ensure that a number of statutory filings are made on time:

Confirmation Statement
Each year you must file a Confirmation Statement with Companies House. It updates the public record on directors, shareholders, and company information. This must be filed within 14 days of the anniversary of incorporation (or the previous Statement).

Annual Accounts and CT600 (Company Tax Return)
You must file annual accounts with Companies House, and a CT600 Company Tax Return with HMRC.

For private companies, accounts are due nine months after the end of the financial year. Your accountant can prepare these, but you remain responsible for their accuracy and completeness.

Updating Companies House of changes
Any changes to directors, share capital, or registered office must be filed promptly via WebFiling.

Maintain accurate records
Keep invoices, expenses, receipts, and bank statements for a minimum of six years. HMRC may review these in the event of an investigation.

Maintain the PSC Register
All companies must keep a record of People with Significant Control (PSC). As a director, you are responsible for ensuring this register is accurate and up to date. PSC information is also filed at Companies House.

Identity verification (from Nov 2025)
From November 2025, all existing and new directors must verify their identity with Companies House. See our full identity checks guide for details on the process and penalties for non-compliance.

What are my general responsibilities as a director?

As a company director, you have responsibilities both under statute (Companies Act 2006) and in general company governance:

• Act within the company’s constitution (its Articles of Association).
• Promote the success of the company, acting in good faith and using independent judgement.
• Exercise reasonable care, skill, and diligence.
• Avoid conflicts of interest and declare any personal interests in company transactions.
• Do not accept benefits from third parties that may compromise your duty.
• Ensure the company does not trade while insolvent (avoid wrongful trading).
• Comply with health & safety regulations and employment law, especially if you have employees.
• Ensure the company has the required insurance (e.g., employers’ liability, professional indemnity, etc.).
• Comply with anti-money laundering (AML) and evolving regulatory requirements.
• The Economic Crime and Corporate Transparency Act 2023 requires that all company directors must now be natural persons (not other companies), with limited exemptions for UK corporate entities. Overseas companies can no longer act as corporate directors.

Note: This list is not exhaustive; you should always ensure that you fully understand your legal obligations before becoming a director.

Non-executive directors

A non-executive director typically plays a supervisory or advisory role, rather than a day-to-day management role. However, from a legal perspective, the law does not distinguish between executive and non-executive directors: all have the same statutory duties and liabilities.

If you’re appointed as a non-executive director, you must still stay informed of board decisions and ensure compliance with legal obligations.

How many directors must a company have? & secretary role

All limited companies must have at least one director. Each director must provide a UK service address for the public register, even if they are not resident in the UK.

This is distinct from the registered office address, which is the company’s official address for statutory communications.

The company secretary role is optional for private limited companies. A company may choose to appoint a secretary to handle administrative tasks, but this is not required. A director may also perform the secretary’s role, though the director(s) remain legally responsible for all decisions and filings.

Financial & dividend responsibilities

Directors often split their compensation between salary and dividends. But dividends must be lawful:

• There must be sufficient retained profits in the company to cover the dividend — a company cannot declare dividends out of capital.
• If dividends are illegally paid (i.e. “ultra vires”), HMRC may treat them as income, subject to income tax and NICs. See our illegal dividends guide for details.
• Directors are also responsible for ensuring correct bookkeeping, profit calculations, and compliance with tax rules.
• You must also manage your director’s loan account correctly. Borrowing from or lending to the company has tax implications if not handled in line with HMRC rules.

For guidance on tax-efficient pay, see our optimum salary guide.

What happens if you breach your duties?

Breaches of director duties can have serious consequences:

• Fines and penalties by Companies House or courts
• Disqualification from acting as a director
• Personal liability for loss or damage to the company
• Reputational damage
• In extreme cases, criminal liability (e.g. for fraud or wrongful trading)

As a director, the ultimate responsibility lies with you, even if your accountant handles much of the work.

The role of your accountant

While the duties above may sound burdensome, in practice, the workload is usually very manageable for a small contractor company. Life is made simpler when you hire an accountant.

Your accountant typically handles tasks like:

• Preparing and filing annual accounts, CT600s, and confirmation statements
• Keeping statutory registers and updating officer changes
• In some cases, providing identity verification services (as an Authorised Corporate Service Provider) for the new ID checks
• Advising on dividends, tax efficiency, and compliance

However, remember that, regardless of delegation, you, as a director, remain legally responsible for the accuracy of any company documents and for meeting all statutory deadlines of your company.