Mcallisters Chartered Accountants

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What are my responsibilities as a director?

Being a director of a company can be an exciting and challenging role. But with great power comes great responsibility, and directors have important legal duties that they must fulfill. In this blog post, we’ll explore the key duties of directors in the UK.

What is a director?

Before we dive into the duties of directors, let’s first define what a director is. In the UK, a director is someone who is appointed to the board of a company and has a role in the management of that company. Directors are responsible for making strategic decisions, setting company goals, and ensuring that the company is run in a way that complies with the law.

What are the duties of directors?

The duties of directors in the UK are set out in the Companies Act 2006. There are seven key duties that directors must fulfill:

  1. Duty to act within their powers

Directors must act in accordance with the company’s constitution and only exercise their powers for the purposes for which they were given.

  1. Duty to promote the success of the company

Directors must act in a way that they consider would be most likely to promote the success of the company for the benefit of its members as a whole.

  1. Duty to exercise independent judgment

Directors must exercise independent judgment and make decisions based on their own opinions and not be influenced by others.

  1. Duty to exercise reasonable care, skill, and diligence

Directors must exercise reasonable care, skill, and diligence in their work, and ensure they have the necessary knowledge and experience to carry out their role effectively.

  1. Duty to avoid conflicts of interest

Directors must avoid situations where they have, or could have, a conflict of interest between their personal interests and the interests of the company.

  1. Duty not to accept benefits from third parties

Directors must not accept benefits from third parties that are given because of their role as a director, unless it is approved by the company.

  1. Duty to declare interests in proposed transactions or arrangements

If a director has a direct or indirect interest in a proposed transaction or arrangement with the company, they must declare their interest to the other directors.

Contact Us

McAllisters Chartered Accountants
Paxton House, No 11 Woodside Crescent
Glasgow
G3 7UL

0141 332 0392
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