I have become a company director for the first time – What are my duties?

10 Jan 2018 Answered by Andrew Swan

Directors are in a position of trust and the law consequently imposes a number of duties, burdens and responsibilities upon directors, to prevent abuse of this position. The legal responsibilities of directors are constantly being added to, it is therefore imperative that you understand these responsibilities and duties of the appointment.

General Duties

The rules governing the general duties that directors owe their companies are codified in the Companies Act 2006 and are as follows;

Duty to act in accordance with the company’s constitution and for proper purposes; (Section 171)

This requires a director to comply with the company’s constitution and to exercise your powers only for the reasons for which they were given. The company’s constitution includes its articles of association, resolutions and agreements of a constitutional nature.

Duty to promote the success of the company; (Section 172)

Directors must act in good faith and in a way that promotes the success of the company for the benefit of its members as a whole.

Duty to exercise independent judgement; (Section 173)

Directors must act in accordance with the company’s articles. However, you are able to exercise independent judgement and make decisions in respect of clients, transfers and other matters.

Duty to exercise reasonable care, skill and diligence; (Section 174)

The expected standard is measured against both objective and subjective yardsticks.

Duty to avoid conflicts of interest; (Section 175)

Directors must avoid a situation in which you have, or could have, an interest that conflicts, or may conflict with the interests of the company.

Duty not to accept benefits from third parties; (Section 176)

This duty is not infringed if your acceptance cannot reasonably be regarded as likely to give rise to a conflict of interest.

Duty to declare an interest in proposed transaction or arrangement; (Section 177)

Directors interested in a transaction or an arrangement with the company must declare the nature and extent of that interest to the other directors.

Other Duties and Responsibilities

Directors are subject to other legal requirements including; ensuring confidence is maintained in the UK economy, the risk of fraud is mitigated and that statutory accounts and documents are filed at Companies House.

Further obligations are imposed on you as a director from other legislation such as: Insolvency Act 1986, Health and Safety at Work Act 1974, Criminal Finances Act 2017 and the forthcoming Data Protection Act 2018, amongst others.

A breach of your duties as a director may be grounds for termination of a service contract and/or disqualification under the Company Directors Disqualification Act 1986.

At Short, Richardson & Forth we offer a full range of director support services including:

  • Online company secretarial support including record keeping and filing

  • Annual returns

  • Assistance in running board meeting

  • Advice on directors duties

  • Reviewing and drafting directors service contracts

For a confidential and informal discussion, please do not hesitate to contact our Commercial team today on 0191 232 0283 or at

  • FB
  • Twitter
  • LinkedIn
  • Youtube

Short Richardson & Forth, 4 Mosley Street, Newcastle upon Tyne, NE1 1DE

Tel: +44 (0)191 232 0283  ·  Email:


Short Richardson and Forth Solicitors Limited is a private limited company registered in England and Wales under company number 10572065, authorised and regulated by the Solicitors Regulation Authority No 637150.

Short Richardson and Forth Solicitors Limited is a private limited company constituted and run in accordance with the provisions of the Companies Act 2006. The term “partner” has been used to denote individual senior solicitors employed by Short Richardson and Forth Solicitors Limited.