As company director, there are a number of duties that apply in your role during the normal course of the company conducting its business. These include the following:
- Keeping accurate companies books and records including accounting records
- Preparing and filing accounts or making returns to Companies House
- Submitting tax returns and paying on a timely basis
- Ensuring that you are not trading at a time when the company could be deemed to be insolvent
- Ensuring that you are not trading at the expense of creditors
Your duties as a director must continue in the event of the company entering any form of insolvency procedure. Your integrity and conduct may be questioned if you fail to do so.
The following is a list of responsibilities which should not be taken as being exhaustive:-
- In the period prior to the formal insolvency taking place, the Directors remain responsible for the Company and must continue to comply with all government and other statutory regulations.
- Immediately prior to insolvency, any acquisition of assets of the company or any proposed transactions in which a director or party is connected may require disclosure to the board under the Companies Act 2006.
- Following insolvency, the Directors may be required to identify any assets belonging to the company and may possibly be required to assist the “Official Receiver” (OR) or “Insolvency Practitioner” (IP) to dispose of and collect in assets. The Directors have an ongoing duty to cooperate and to provide information to the OR/IP.
- There is an overriding obligation for directors to act in the best interests of creditors. Failure to do so may expose Directors to a claim for misfeasance or breach of duty.
- If you are a Director of the company and the company enters liquidation you will be prohibited from using any name by which the company was known or similar names suggesting an association with the company. However, it is possible to use such a name if the correct procedure is followed.
- Directors will be required to deliver a complete record of the company’s accounting records.
- Directors should be aware that any personal guarantees given on behalf of the company may be called in.
- You can act as a Director of another company unless you are disqualified from doing so.
If you have misapplied or misappropriated company funds at the expense of creditors, this could result in disqualification proceedings being taken.