One of the most common misconceptions about limited companies is that the director is the owner of the company – this is not the case. So if not the director, who?
The shareholder or shareholders own the company.
It’s an easy mistake to make. After all, Companies House require more information for the director (name, address, date of birth, nationality, occupation, service address, residential address) then they do for the shareholder (name, address). But no, the shareholder owns the limited company.
So what does the limited company director do?
In short, the role of the director is to run the company. According to GOV.UK, the directors’ responsibilities are:
- try to make the company a success, using your skills, experience and judgment
- follow the company’s rules, shown in its articles of association
- make decisions for the benefit of the company, not yourself
- tell other shareholders if you might personally benefit from a transaction the company makes
- keep company records and report changes to Companies House and HM Revenue and Customs (HMRC)
- make sure the company’s accounts are a ‘true and fair view’ of the business’ finances
- register for Self Assessment and send a personal Self Assessment tax return every year
As a final note, it’s worth remembering that the company director can still be a shareholder and that a limited company can be formed with just one person.
We hope you found this post useful – see our blog for more limited company tips and information.
By Mathew Aitken at MadeSimple