In short: A director manages the company on behalf of its shareholders. The Companies Act 2006 sets seven general duties, including acting within the company's powers, promoting its success and avoiding conflicts of interest. Directors are also responsible for keeping the company's filings, records and tax affairs up to date.
A limited company is a separate legal person, but it can only act through people. The directors are those people. Whether you run a one-person company or sit on the board of a larger business, the law expects the same basic standards from you.
What a director does
Directors make the decisions that run the business day to day: signing contracts, hiring staff, managing money and setting strategy. In a small company the director is often also the only shareholder. Even then, the roles are legally separate. As a director you act for the company, not for yourself.
The seven general duties
The Companies Act 2006 (sections 171 to 177) lists seven general duties. In plain words:
- Act within your powers. Follow the company's constitution (mainly the articles of association) and use your powers only for the purposes they were given.
- Promote the success of the company. Act in the way you believe, in good faith, is most likely to benefit the members as a whole. You must consider long-term consequences, employees, suppliers and customers, the community and the environment, and the company's reputation.
- Use independent judgement. Make your own decisions. You can take advice, but you cannot simply do what someone else tells you.
- Use reasonable care, skill and diligence. You are judged against what a reasonable director in your position would know and do, plus any extra skills you actually have.
- Avoid conflicts of interest. Do not put yourself in a position where your personal interests conflict with the company's, unless it is properly authorised.
- Do not accept benefits from third parties. Do not take gifts or benefits given because you are a director, if they could create a conflict of interest.
- Declare interests in proposed transactions. If you have a personal interest in a deal the company is considering, tell the other directors before it goes ahead.
Practical duties: filings and records
Beyond the general duties, directors must make sure the company:
- files its Confirmation Statement at least once every 12 months;
- files annual accounts with Companies House (first accounts are due 21 months after incorporation, then 9 months after each year end) and a Corporation Tax return with HMRC;
- registers for Corporation Tax within 3 months of starting to trade;
- keeps its statutory registers (members, directors, PSCs) up to date;
- keeps a registered office that is an "appropriate address" and a registered email address;
- tells Companies House about changes such as new directors or a new registered office.
Since 18 November 2025, every director must also have verified their identity with Companies House. Existing directors verify when they file their next confirmation statement during the transition period.
When the company is in financial difficulty
When a company is, or is likely to become, insolvent, directors must give priority to the interests of creditors. Continuing to trade and taking on debt when there is no reasonable prospect of avoiding insolvent liquidation can lead to personal liability for wrongful trading. If you are worried about your company's finances, speak to an accountant or a licensed insolvency practitioner early.
What happens if a director breaches their duties
The company can take action against a director who breaches their duties, for example to recover losses or profits. Serious failures, such as persistent late filing, fraud or unfit conduct, can lead to fines, personal liability or disqualification as a director. Whether you are at risk depends on the facts, so take legal advice if a problem arises.
Good habits for directors
- Keep personal and company money separate.
- Record major decisions in board minutes or written resolutions.
- Put filing deadlines in your calendar, or ask someone to manage them.
- Declare any personal interest in a contract before the company signs it.
- Read what you sign, and ask for advice when you are unsure.
How Form My Company can help
We help directors stay compliant with filings, registers and identity verification. As a Companies House ACSP, we can verify your identity for you, remotely, and give you your personal code. Our Compliance and Due Diligence service costs £150, and we can prepare board Resolutions and Minutes for £100. For accounts and tax, see our Annual Accounts service.
Frequently asked questions
What are the main duties of a company director?
The Companies Act 2006 sets seven general duties: act within powers, promote the company's success, use independent judgement, use reasonable care and skill, avoid conflicts of interest, not accept third-party benefits, and declare interests in proposed transactions.
Is a director personally liable for company debts?
Usually not, because a limited company is a separate legal person. A director can become personally liable in some cases, such as signing a personal guarantee, wrongful trading or fraud.
Can I be a director and a shareholder at the same time?
Yes. Many small companies have one person who is both the only director and the only shareholder. The roles are still legally separate.
Do directors have to verify their identity?
Yes. Since 18 November 2025 every new director must verify their identity with Companies House, and existing directors verify at their next confirmation statement during the transition period.
What is the minimum age to be a director?
A director must be at least 16 years old.