Beware if you are a Company Director

Many people set up a limited company as the vehicle to run their business.

Many people set up a limited company as the vehicle to run their business. This route has many advantages not least the fact that the limited company is the legal entity which will enter into contracts and agreements etc. and this may have the effect of limiting the financial exposure of the people behind the company in the event of difficulties arising in the future.

For this reason people often consider that setting up a company is an easy option. People often think of a company as being their 'own' and forget that a company is a separate legal entity and that there are considerable responsibilities involved in running a company.

Companies House is the United Kingdom's Registrar of Companies. It incorporates and dissolves limited companies, registers the information companies are legally required to supply and makes that information available to the public. According to the Companies House website there are more than three million limited companies registered in the UK and five hundred thousand new companies are incorporated in each year.

Companies House is an executive agency of Her Majesty's Government and falls within the Department for Business Innovation and Skills. One of the functions of Companies House is to take enforcement proceedings against the officers of companies (i.e. directors and company secretaries) for failure to carry out regulatory requirements such as the filing of annual returns and company accounts.

A recent survey has revealed that successful convictions by Companies House against company directors exceeded 3,300 in 2014. There are strict deadlines which companies are required to comply with for filing annual returns and accounts. Companies House appears to be taking a more proactive approach to enforcing such deadlines against company directors.

An interesting fact revealed by the recent research is that many of the directors who have been convicted run small firms.

Accordingly it is important for you to ensure that you are aware of the full range of your responsibilities as a company director.

To discuss this or any other company related issue, contact us.