Company Director
1. Can anyone be a company director?
Generally it is up to the members to appoint the people they believe will run
the company well on their behalf. The only restrictions that prevent anyone becoming
a company director are:
the person must not be an undischarged bankrupt (except with leave of the court);
the person must not have been disqualified by a court from acting as a company
director (unless he or she has been given leave (permission) to act by a court
for a particular company);
in Scotland, anybody under the age of 16; and
for a PLC or their subsidiaries, anybody over the age of 70 unless specifically
approved by a general meeting of the company.
2. What responsibilities does a company director have towards Companies
House?
Every company director has a personal responsibility to ensure that statutory
documents are delivered to the Registrar as and when required by the Act. In
particular:
accounts (only for limited companies);
annual returns (Form 363);
notice of change of directors or secretaries or in their particulars (Forms 288a/b/c);
and
notice of change of registered office (Form 287).
3. Are company directors really prosecuted?
Yes. On average more than 1,000 company directors are prosecuted each
year for failing to deliver accounts and returns to the Registrar on time.
Persistent failure to deliver statutory documents on time may also lead to
a director being disqualified from taking part in the management of a company,
for a specified period.
4. What happens if accounts or annual returns are not filed?
Each company director of the company could be prosecuted. Failure
to deliver documents on time is a criminal offence. On conviction, a company
director could end up with a criminal record and a fine of up to £5,000
for each offence.
Alternatively, if the Registrar believes that the company is no longer carrying
on business or in operation, he could strike it off the register and dissolve
it. If this happens all the assets of the company, including its bank account
and property, generally become the property of the Crown.
The company can only be restored to the register and continue in existence
by means of a court order.
5. What happens if accounts are delivered late?
As a company director of a private limited company, you normally have
a maximum of 10 months from the accounting reference date in which to deliver
your company's accounts to the Registrar. The accounting reference date is
the date to which your accounts must be prepared.
As a company director of a public limited company, you normally have a maximum
of 7 months from the accounting reference date in which to deliver your company's
accounts to the Registrar.
Important if your company's first accounts cover a period of more than 12
months, they must reach Companies House within 22 months of the date of incorporation
for private companies and 19 months for public companies.
If accounts are received late, the company will automatically be charged
a 'late filing penalty'. These penalties can be in addition to any fine imposed
by a court - as explained in question 3 of this chapter. The late filing penalty
will be calculated according to the following scale:
Length of delay Private
company Public
company
3 months or less £ 100 £ 500
3 months one day to 6 months £ 250 £1000
6 months one day to 12 months £ 500 £2000
More than 12 months £1000 £5000
6. How can prosecution and penalties be avoided?
A company director should make sure the company complies on time with
all its filing obligations, not only in connection with its accounts and annual
returns, but in connection with all other documents required under the Act.
7. Isn't my accountant supposed to do all this?
Your accountant's responsibilities depend on the agreement you have
with him or her. However, the responsibility to deliver accounts and other
statutory documents rests entirely with the company directors.
Ensure that your accountants have all the necessary information to prepare
your accounts and get them audited on time. If necessary, chase your accountants.
Don't just assume they are getting on with the job. Accountants and financial
advisers don't get prosecuted or penalised for late filing. You do!
8. Why does Companies House need this information?
In exchange for the benefits of trading with limited liability, companies
must deliver certain information about themselves to the Registrar. He must
then make this information available for inspection by the public so that they
can make informed decisions about companies that they may wish to invest in
or do business with. Remember, delivery of documents does not take place until
they reach the Registrar.
Company Director is also know as
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