Company director duties in the UK: what the law expects of you.

Managing director or director: is there a difference?

"Managing director" is a job title. It usually means the director who runs the business day to day. Company law does not give a managing director a separate set of legal duties. The same duties apply to every director on the board.

They also reach further than many people expect. GOV.UK says the duties still apply if you are not active in the role, if someone else tells you what to do, or if you act as a director without being formally appointed. They can even apply to someone who controls the board without sitting on it.

So a director who leaves everything to a business partner is still on the hook. Being "only on paper" is not a defence.

The 7 general duties

The Companies Act 2006 sets out 7 general duties in sections 171 to 177. In everyday language, they are:

• Act within your powers. Follow the company's constitution, including its articles of association, and use your powers only for the purpose they were given.
• Promote the success of the company. Act in good faith for the benefit of the members as a whole. That means weighing the long-term effects of decisions, the interests of employees, relationships with suppliers and customers, the community and environment, and the company's reputation.
• Use independent judgement. You can take advice, but the final decision must be yours. You must not let other people control your powers as a director.
• Take reasonable care, skill and diligence. You are judged against what is expected of a director in your role, and against your own knowledge and experience. A director with a finance background is held to a higher standard on financial matters.
• Avoid conflicts of interest. Avoid situations where your own interests could clash with the company's. You must not use company property, information or opportunities for yourself. This duty continues after you stop being a director.
• Do not accept benefits from third parties. Do not take gifts or other benefits offered because you are a director. The company may allow reasonable hospitality where there is clearly no conflict.
• Declare an interest in a proposed transaction. If you could benefit personally from a deal the company is about to make, tell the other directors and the members before it goes ahead. A contract with a business owned by a relative is a common example.

GOV.UK also lists other duties, such as not misusing the company's property and keeping its affairs confidential.

When the company is in financial trouble

The duty to promote the company's success changes if the company becomes insolvent. In GOV.UK's words, your responsibilities as director then apply towards the creditors instead of the company. A creditor is anyone the company owes money to.

In practice, that means thinking about who will be paid, and whether taking on more credit is fair to the people already owed. This is the point to take professional advice, not to wait and hope. GOV.UK warns that in the worst cases, directors can become liable for the company's debts or be banned from acting as a director.

You can only spot this early if your figures are current. A director who sees the bank balance but not the unpaid bills cannot tell whether the company can meet its debts.

Records you must keep

A limited company must keep two kinds of record.

• Company records. Details of shareholders, the results of votes and resolutions, and any loans or mortgages secured on company assets, among other things.
• Accounting records. All money the company receives and spends, its assets, the debts it owes and is owed, year-end stock, and the goods it buys and sells. Receipts, invoices, bank statements and petty cash books support these.

Records must be kept for 6 years from the end of the last company financial year they relate to, and sometimes longer. Our guide on how long to keep business records covers the exceptions.

This is a duty with real teeth. GOV.UK says you can be fined £3,000 by HMRC, or disqualified as a director, if you do not keep accounting records.

Accounts, tax returns and Corporation Tax

Each year, directors are responsible for making sure the company:

• Files its annual accounts with Companies House. The deadline is 9 months after the end of the financial year. A new company's first accounts are usually due 21 months after it registered (sooner if the first accounting period is shortened).
• Files its Company Tax Return with HMRC. This is due 12 months after the end of the accounting period for Corporation Tax.
• Pays its Corporation Tax. Payment is due 9 months and 1 day after the end of the accounting period, so it is due before the return.

The accounts and the tax return are separate documents for separate bodies. Our guide on company tax returns vs company accounts explains the difference, and how to pay your Corporation Tax bill covers the payment side.

What late accounts cost

Companies House charges a penalty for late accounts. For a private limited company, it is:

• Up to 1 month late: £150
• 1 to 3 months late: £375
• 3 to 6 months late: £750
• More than 6 months late: £1,500

The penalty is doubled if the accounts are late 2 years in a row.

Keeping Companies House up to date

Directors must also keep the public register accurate.

• Confirmation statement. You must file at least one every 12 months, up to 14 days after the review period ends. The fee is £50 online. If yours has slipped, see our guide on an overdue confirmation statement.
• Changes. Tell Companies House about changes such as a new registered office address, or a change in the people with significant control (PSCs) or their details.
• Identity verification. Since 18 November 2025, identity verification has been a legal requirement for directors and PSCs. A director of an existing company gives their personal code with the company's next confirmation statement. If you direct several companies, you do this for each one.

Some of your details appear on the public register, so it pays to check what is shown about you.

Money between you and the company

A limited company is a separate legal person. Its money is not your money, even if you own every share. You can take money out as salary, dividends or repaid expenses. Anything else is usually a director's loan.

Directors must track money borrowed from or paid into the company, normally in a director's loan account. The balance at the year end goes on the balance sheet. If a loan is not repaid within 9 months of the end of the accounting period, the company may have to pay extra Corporation Tax on it, and there can be personal tax too.

For the right way to take money out, read paying yourself a limited company director salary. For what the company can pay for, see allowable expenses limited companies can claim.

You can delegate the work, not the responsibility

Most directors hand some of this to a bookkeeper or accountant. That is sensible. But GOV.UK is clear that you are still legally responsible for the company's records, accounts and performance.

So delegating well means staying involved:

• Look at the figures regularly, not just at the year end
• Answer questions about unexplained payments promptly
• Know your filing and payment dates, and check they were met
• Keep company and personal spending apart
• Ask what the numbers mean before you sign the accounts

Our guide on bookkeepers vs accountants explains who usually does what.

What can happen if duties are not met

GOV.UK says a director who does not meet their responsibilities can be fined, prosecuted or disqualified from being a director. A director of a fraudulent company may be banned for up to 15 years, held liable for the company's debts if it becomes insolvent, and find it hard to get credit afterwards.

GOV.UK also warns about a scam where "recruiters" pay people to be named as a director of a company they know nothing about. If you accept a directorship, you take on the legal responsibility, whoever really runs the business.

A simple routine that covers most of it

Most director duties come back to the same habit: knowing what is happening in the company. Books that are reconciled and up to date help you meet nearly every duty in this guide. They show whether the company can pay its debts. They give you the records the law requires. And they make the accounts, the tax return and the confirmation statement straightforward rather than a rush.

If you are new to running a company, our guide to year-end accounts and the bookkeeping glossary are good next steps.