Directors'responsibilities

4. Duties Under Company Law

Directors are personally responsible for ensuring that the company complies with company law. These duties are usually delegated to the company secretary, if the company has one - from 6 April 2008, it will no longer be obligatory for a private company to have a separate company secretary (see Role of the company secretary) - or to a director or trusted employee, but you must ensure that they are carried out.

4.1 You must make sure that the statutory returns are filed with the Registrar of Companies on time.

• These include the annual report and accounts, the annual return and notice of changes to directors and secretaries.
• Failure to deliver can result in fines for which you may be personally liable, disqualification or criminal conviction.

4.2 All companies have to file accounts with Companies House.

• In most cases small and medium-sized companies can submit abbreviated accounts. Small companies with a turnover below £6.5 million do not need to have their accounts audited and as such are not required to appoint an auditor.
• Directors are required to sign declarations that they have not hidden any material information. If they are later found to have done so, they face fines or imprisonment.

4.3 Private companies are no longer obliged to hold an AGM, although they must give adequate notice of and hold a general meeting if any director or at least 5 per cent of members (or 10 per cent if a general meeting has already been requested within the previous 12 months) request it.

• If you do hold a general meeting, you must give appropriate notice (usually 14 days) and ensure that minutes record all decisions taken. This could protect you if you face legal action later (see 6).

4.4 You are no longer required to circulate copies of the annual accounts for approval at a general meeting. However, members must be sent a copy before they are filed with the Registrar of Companies.

• A director must sign the balance sheet and approve and sign off the directors' report.