A director carries seven general duties under the Companies Act 2006. On top of that sit the filing duties, record keeping duties and tax duties.
Hiring an accountant does not move any of them. GOV.UK is clear about that. You stay legally responsible for the company’s records, accounts and performance.
This guide covers the legal duties and the practical ones. It also explains what can happen when a director gets them wrong.
Quick answer
Follow the articles of association. Keep proper records. Prepare and file accounts on time. Pay Corporation Tax. Declare any personal interest in a company transaction. Verify your identity at Companies House. Take money out only as salary, dividend, expense refund or a recorded loan.
What are the statutory duties of a company director?
The Companies Act 2006 sets out seven general duties. Act within your powers. Promote the success of the company. Use independent judgement. Apply reasonable care, skill and diligence. Avoid conflicts of interest. Do not accept benefits from third parties. Declare any interest in a proposed transaction.
Those duties sit in sections 171 to 177 of the Act. You can read the general duties of directors in full on legislation.gov.uk.
Here is what each one means in practice:
- Act within your powers. Stick to what the articles of association allow.
- Promote the success of the company. Decide in the company’s interest, not your own.
- Use independent judgement. Take advice, then make your own call.
- Reasonable care, skill and diligence. The bar rises with your actual expertise.
- Avoid conflicts of interest. A side business competing with the company is the classic case.
- No benefits from third parties. A supplier gift given to win work is the classic case.
- Declare an interest. Tell the other directors before the company signs.
The duties apply from your first day in the role. A sole director of a one person company has the same duties.
The seventh duty catches people out. GOV.UK puts it plainly under director’s responsibilities. Tell other shareholders if you might personally benefit from a transaction the company makes.
What are a director’s filing and record duties?
Keep company records and accounting records. Prepare annual accounts. File those accounts with Companies House. File a Company Tax Return with HMRC and pay Corporation Tax. File a confirmation statement each year. Report changes to directors, addresses and shares as they happen.
Records come first, because everything else depends on them. Companies must keep accounting records for six years.
The deadlines run on two clocks. Companies House wants accounts within nine months of year end. HMRC wants the tax nine months and a day after the period ends. The Company Tax Return is due within 12 months.
We cover Companies House filing deadlines in full, including the late filing penalties.
New directors often meet these duties in the wrong order. Read how to register a limited company first.
How can a director take money out of the company?
Four legal routes. A salary through PAYE. A dividend from post-tax profits. A refund of business expenses you paid personally. Or a director’s loan, which you record and repay. Anything else is company money spent without authority, and it creates problems at year end.
The company’s money isn’t your money. That is the hardest idea for a new director.
Salary. Runs through payroll with tax and National Insurance deducted.
Dividends. Paid from profits after Corporation Tax, in proportion to shareholdings. No profit means no dividend.
Expense refunds. You paid for something the company needed. The company pays you back, and you keep the receipt.
Director’s loan. Everything else. GOV.UK sets out the director’s loan rules.
Two figures matter on that last route. Repay within nine months of the accounting period end. Miss that and the company pays 33.75%. Owe more than £10,000 at any point and it counts as a benefit in kind.
Both figures rely on a balance you can only know if you track it. Record every personal payment the week it happens.
What does identity verification mean for directors?
Every director verifies their identity with Companies House. It became mandatory on 18 November 2025. You verify once through GOV.UK One Login. That gives you a Companies House personal code. You then give the code with your company’s next confirmation statement.
You verify as a person, not as a company officer. GOV.UK covers this under identity verification.
One code covers every company you’re a director of. Get it once and reuse it.
People with significant control verify too. A PSC verifies in the first fourteen days of their birth month.
What happens if a director breaches their duties?
Three outcomes, and they stack. Fines from Companies House or HMRC. Prosecution in serious cases. Disqualification from acting as a director. HMRC can also fine you £3,000 for poor accounting records. That sits on top of any late filing penalty.
Late accounts bring an automatic penalty from Companies House. That one arrives without any investigation.
Poor records bring the £3,000 fine and the risk of disqualification. This is the one directors underestimate.
Serious breaches go further. Trading while insolvent is one. Using company money as personal money is another. Both can make a director personally liable for company debts.
None of this is aimed at ordinary mistakes made in good faith. It is aimed at directors who ignore the duty rather than misapply it.
Can you delegate director duties?
You can delegate the work, not the duty. Hire an accountant to prepare and file the accounts. Hire a bookkeeper to keep the records. GOV.UK still holds you legally responsible for the company’s records, accounts and performance. The penalty letter arrives with your company’s name on it.
Delegation is normal and sensible. Almost every small company uses an accountant.
Two habits keep you safe. Diary the deadlines yourself, and get written confirmation that each filing was accepted.
Ask one more question each year. Are the records complete and matched, or are we estimating?
Some of this traces back to how the company was set up. Most of it gets easier if you get limited company formation right. Clean share structure, clear year end, one director who owns the calendar.
Taking on the role
Read the articles of association once, properly. Most directors never do, and they are the rules you promised to follow.
Then separate the money. Business account for business, personal account for personal, from day one.
Then diary four dates. Year end, accounts deadline, confirmation statement, tax payment.
DASA’s limited company registration service sets the company up. We brief you on the duties that follow. Tell us how many directors and shareholders you’ll have. Get a quote and we’ll send you our current pricing.
This article gives general information about UK company director duties. It’s not financial, tax or legal advice. Directors’ duties are a legal matter and every situation differs. Speak to a qualified accountant or solicitor about your own position.
Frequently asked questions
What are the statutory duties of a company director?
Seven general duties under the Companies Act 2006. Act within your powers, promote the success of the company, use independent judgement, apply reasonable care and skill, avoid conflicts of interest, refuse third party benefits, and declare any interest in a proposed transaction.
What are a director’s filing responsibilities?
Keep company and accounting records, prepare annual accounts, file them with Companies House, file a Company Tax Return with HMRC, pay Corporation Tax, file a confirmation statement, and report changes to directors, addresses and shares.
How can a director legally take money out of a company?
Four routes. A salary through PAYE, a dividend from post-tax profits, a refund of business expenses you paid personally, or a director’s loan that you record and repay. Anything else creates problems at year end.
What happens if a director breaks their duties?
Fines from Companies House or HMRC, prosecution in serious cases, and disqualification from acting as a director. HMRC can fine £3,000 for failing to keep proper accounting records, separately from any late filing penalty.
Can a director delegate their responsibilities?
You can delegate the work, not the duty. An accountant can prepare and file the accounts. GOV.UK still holds the director legally responsible for the company’s records, accounts and performance.