Starting or joining a limited company can indeed be a very exciting time in your life. As a limited company director, you can enjoy a number of benefits. Some of these include the fact that your bills, debts and obligations are separate from the company’s ones. Therefore, if any judicial proceedings take place against the company, you are personally exempt from making any payments towards things such as debts and this offers directors quite a big sense of security in the business world. In addition to the above, your personal property will not be able to be used to set off debts and you can rest assured that this movable or immovable property will remain yours even if the company goes under. But have you ever asked yourself what kind of characteristics a director of a limited company needs to have? In this article, we clarify who can be a company director so that you know where you stand and have a better understanding of your position.
Who can be a company director?
A limited company must have a minimum of one director. It is certainly possible to have more than one, and they don’t necessarily have to reside in the United Kingdom (UK) to be considered such. However, there are various rules and regulations that need to be followed by company directors before they undertake the responsibility of running a company. Here is a breakdown of the most important ones:
- Age: as a starting point, the laws in the UK stipulate that a director must be at least 16 years of age before they can proceed to run the company in question. It is advisable, however, to ensure that directors of a company are at least 18 years old so that the company doesn’t run into problems in the future, particularly when it comes to signing contracts and entering into more complex deals.
- Real or natural persons only: the title of a director can only be carried by natural persons and not legal or judicial entities.
- Location: as mentioned above, a limited company director does not have to reside in the UK. In fact, they don’t even need to be a UK resident to carry out their responsibilities. However, the company is required by law to have a registered address in the UK.
Although this may be quite clear and straightforward, there are some important aspects to keep in mind. These relate to cases when a director may be disqualified from acting in that capacity. Because of the serious responsibility of this position, which requires directors to be “legally responsible for running the company and making sure company accounts and reports are properly prepared”. Such circumstances include if a director is considered an “undischarged bankrupt” – or in other words, a person against whom legal proceedings for bankruptcy are carried out. Further to this, a court may have previously disqualified you from being a director in the future and such people are usually considered “unfit” to hold office. The duration of such disbarring may range from two to 15 years. Some of the possible reasons for such disqualifications include “fraud, failure to keep proper records and persistently breaching company laws”.
When it comes to expert tax accountants in London
Whether you’re unsure of your responsibilities as a limited company director or you need some additional guidance related to corporation tax, the requirements of the Companies House or the HMRC, you can always rely on our trusted advisors to help you with every aspect of running an efficient and profitable corporation. Don’t hesitate and get in touch with us today!