Director Responsibilities and Compliance Requirements

Director responsibilities begin the day you are appointed, whether you run a one-person company or sit on the board of a large business. Being a director is a legal role, not just a job title. The law expects you to act in the company's interests, keep proper records, file on time and treat creditors fairly when money is tight. Most directors never get into trouble, but those who ignore their director responsibilities can face fines, personal liability and disqualification. This guide explains what is expected of you under UK law.

Who counts as a director?

A director is anyone appointed to manage the company and registered at Companies House. The law can also treat people as directors when they are not formally appointed:

• De facto directors act as directors without being appointed, for example by making board decisions and holding themselves out as a director.
• Shadow directors are people whose instructions the board is used to following, even though they stay in the background.

Both can carry the same director responsibilities and liabilities as a registered director. Since November 2025, every registered director must also have verified their identity with Companies House. Our guide to director ID verification explains why that matters.

The seven general duties

The Companies Act 2006 sets out seven general duties that apply to every director:

1. Act within your powers. Follow the company's articles of association and only use your powers for the purposes they were given.
2. Promote the success of the company. Act in good faith in the way most likely to benefit the members as a whole, having regard to the long term, employees, suppliers and customers, the community and the environment, and the company's reputation.
3. Exercise independent judgment. Make your own decisions rather than simply following someone else's instructions.
4. Exercise reasonable care, skill and diligence. You are judged both by what can be expected of any director and by your own knowledge and experience. An accountant on the board is expected to spot accounting problems.
5. Avoid conflicts of interest. Do not put yourself in a position where your own interests conflict with the company's, unless it has been properly authorised.
6. Do not accept benefits from third parties given because you are a director, if they could create a conflict of interest.
7. Declare interests in proposed transactions with the company, such as the company buying from a business you own.

What the duties look like day to day

The seven duties can sound abstract, so here is how they show up in ordinary decisions:

• Buying from a friend's business. You must declare the connection to the board and make sure the deal is on fair terms for the company.
• Taking a job with a competitor. This is likely to create a conflict of interest that needs the company's authorisation.
• Signing a big contract you have not read. That falls short of reasonable care, skill and diligence.
• Using company money for a personal holiday. That is acting outside your powers, and the money must be repaid or treated as a loan or salary.
• Accepting a gift from a supplier who wants more work. That may breach the duty not to accept benefits from third parties.

The common thread is simple: put the company's interests first, be open about your own, and keep a record of how you reached important decisions.

Director responsibilities in a one-person company

In a company where you are the only director and shareholder, it is easy to feel that the company's money is your money. Legally it is not. The same director responsibilities apply: you still need board decisions recorded, dividends paid only from profits, and money taken out properly as salary, dividends or a recorded loan. Getting this right protects the limited liability that is often the reason for setting up a company in the first place.

Duties when the company is in financial difficulty

When a company is insolvent or close to it, director responsibilities shift. You must start to consider the interests of creditors, and give them more weight as the risk of insolvency grows. Continuing to trade and taking on new debts when you know, or ought to know, that insolvency cannot be avoided can amount to wrongful trading, which can make you personally liable to contribute to the company's debts. Dishonest trading to defraud creditors is fraudulent trading, a criminal offence.

If you are worried about the company's finances, get advice early. Directors who take proper advice and act to protect creditors are in a much stronger position.

Companies House responsibilities

Directors are responsible for making sure the company files the right information with Companies House on time, even if an accountant does the filing. That includes:

• Annual accounts, usually due nine months after the end of the financial year for private companies, or 21 months after incorporation for the first accounts.
• The confirmation statement, at least once every 12 months. See our guide to the confirmation statement deadline.
• Changes to directors, the registered office, PSCs, share capital and the articles, mostly within 14 days.
• An appropriate registered office address and a registered email address that someone monitors.

Late filing penalties for accounts

Late accounts bring automatic penalties for the company: £150 if up to a month late, £375 up to three months, £750 up to six months, and £1,500 over six months. The penalty doubles if accounts are late two years in a row. Directors can also be prosecuted for failing to file.

HMRC responsibilities

Director responsibilities include making sure the company meets its tax obligations:

• registering for Corporation Tax, filing the Company Tax Return and paying on time
• running PAYE correctly if the company pays salaries, including to directors
• registering for and filing VAT when required
• reporting expenses and benefits for directors and staff

Directors may also need to file their own Self Assessment return, for example to report dividends above the dividend allowance.

Keeping records

The company must keep accounting records that show its transactions and financial position, and records of board and shareholder decisions. HMRC expects business records to be kept for at least six years. The company must also keep its register of members up to date. Since 18 November 2025, companies no longer have to keep their own registers of directors or PSCs, because that information is held by Companies House, but it still has to be right.

When directors become personally liable

A limited company protects its owners, but director responsibilities do not disappear behind it. Directors can become personally liable in situations such as:

• signing a personal guarantee for a lease or loan
• wrongful or fraudulent trading
• an overdrawn director's loan account that has to be repaid if the company becomes insolvent
• misfeasance, such as misusing company money
• unpaid tax in some cases, where HMRC can issue a personal liability notice or joint liability notice, particularly after repeated insolvencies
• acting while disqualified

Disqualification

A director can be disqualified for between two and 15 years for unfit conduct, for example persistent failure to file, trading to the detriment of creditors, failing to pay tax, or misusing company money. A disqualified person cannot be a director or be involved in forming, promoting or managing a company without court permission. Breaking a disqualification order is a criminal offence and can make the person personally liable for the company's debts.

Practical habits for meeting your director responsibilities

• Know your deadlines. Keep a calendar of accounts, confirmation statement, Corporation Tax, VAT and payroll dates.
• Read the numbers. Look at management accounts or bank balances every month, not just at the year end.
• Record decisions. Keep minutes or written resolutions for important decisions, especially dividends and conflicts of interest.
• Keep company and personal money separate. Every withdrawal should be salary, dividend, expense repayment or a recorded loan.
• Declare interests to the board whenever you have a personal stake in a decision.
• Take advice early if cash flow becomes a worry.
• Check the public register once a year to make sure your company's details are correct.

Dividends and director responsibilities

Directors must only pay dividends out of distributable profits. Paying a dividend when the company does not have enough retained profit is unlawful, and shareholders who knew or should have known may have to repay it. Before declaring a dividend, check the latest accounts or up-to-date management accounts, and record the decision in board minutes with a dividend voucher for each shareholder.

Director responsibilities: key points

• Directors owe seven general duties under the Companies Act 2006.
• Creditors' interests come first as insolvency approaches.
• Directors are responsible for Companies House and HMRC filings, even when someone else files.
• Limited liability has limits: guarantees, wrongful trading and misuse of funds can make you personally liable.
• Persistent failures can lead to disqualification for up to 15 years.

Companies House sets out the main duties on GOV.UK: running a limited company: directors' responsibilities.

Stay on top of your duties

We help directors meet their filing obligations, update Companies House when the board changes, and keep track of every deadline. See our director update service.