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Directors’ Responsibilities

Directors’ Responsibilities  

What is a Director? 

A director is defined as “any person occupying the position of director by whatever called”.  This is the most common way in which a person acts as a company director.   

A shadow director is defined as “any person in accordance with whose directions and instruction, the directors of the company are accustomed to act”.  This covers persons who act as a company director, but are not formally appointed, or people who do not file their details with Companies House.  

 In addition, a person can be said to be a de facto director.  This is someone who, again, is not formally appointed but holds himself out as a director. 


What are my duties as a director? 

A company operates through its shareholders and its director / directors’.  The role of the directors’ is to make the strategic and operational decisions of the company and is responsible for ensuring that the company meets its statutory obligations.  Generally, the directors’ must always act in accordance with what s/he (or they) believe to be in the best interests of the company, and avoid any conflict of interest between company and personal affairs.   
As a director of a limited company, you must:- 


You can employ people to manage some of these day to day tasks, for example a bookkeeper or the company’s accountant.  However, you are legally responsible for the company’s records, accounts and its performance and may be fined, prosecuted or even disqualified from acting as a director in the future if you do not meet your responsibilities. 

If you are the director of a company which enters into Administration or insolvent Liquidation, then your conduct prior to that event may become subject to further scrutiny.  In the event the company enters into one of the insolvency processes referred to above, the office holder (i.e. Administrator or Liquidator) will be obliged to submit a report to The Insolvency Service. 

This report must be submitted within 3 months of the office holder’s appointment, to the Directors Conduct Reporting Service (“DCRS”).  On submission of the report, the office holder will be required to answer a number of structured, factual questions, but is not required to give their opinion on whether or not the directors’ conduct renders them unfit to be concerned in the formation, management or promotion of a company. 

The DCRS identifies cases which should be highlighted to The Insolvency Service for further review. It will then be for The Insolvency Service to consider whether disqualification action is appropriate.  We understand that this level of scrutiny can be daunting.  We will always give you an honest appraisal of the potential concerns and encourage you to comply with any requests for information, books or records.      


Please note:  This guide is intended to provide basic information only.  Where specific advice is required, we recommend you seek professional advice from a licensed Insolvency Practitioner, or other suitably qualified person.    


Careful consideration must be given to all options available to a financially distressed business.  For more advice, fill out our Contact Formand we will be in touch.  Alternatively, call our FREE ADVICE LINE on 0800 781 0990.