8 Things You Must Do As Director’s Duties Under The UK Companies Act 2006

Jul 17th '23

In the UK, directors of a limited company have various duties and responsibilities outlined in the Companies Act 2006. These duties are designed to ensure that directors act in the best interests of the company and its shareholders.


Here are some key duties of directors under the Companies Act 2006:


  1. Duty to act within powers: Directors must exercise their powers in accordance with the company’s constitution and only for the purposes for which they are conferred.
  2. Duty to promote the success of the company: Directors must act in a way that they consider, in good faith, promotes the success of the company for the benefit of its shareholders as a whole. They should also consider the interests of other stakeholders, such as employees, suppliers, customers, and the wider community, as well as the long-term consequences of their decisions.
  3. Duty to exercise independent judgment: Directors must exercise independent judgment and make decisions based on their own evaluation of the relevant information.
  4. Duty to exercise reasonable care, skill, and diligence: Directors must exercise the care, skill, and diligence that would be expected of a reasonably diligent person with their knowledge and experience.
  5. Duty to avoid conflicts of interest: Directors must avoid situations where they have, or could have, a direct or indirect interest that conflicts or may conflict with the interests of the company. If such a conflict arises, directors must declare it and seek board approval.
  6. Duty not to accept benefits from third parties: Directors must not accept benefits from third parties that are conferred because of their position as a director or because of any action they took as a director, unless the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.
  7. Duty to declare interests in proposed transactions or arrangements: Directors must declare any direct or indirect interest they have in a proposed transaction or arrangement with the company.
  8. Duty to promote compliance with the law: Directors must ensure that the company complies with its legal obligations, including company law and other relevant laws and regulations.


These duties apply to all directors, regardless of their specific role or title within the company. It’s important to note that this is a general overview, and the Companies Act 2006 contains more detailed provisions regarding directors’ duties. Directors should familiarize themselves with the full text of the act and seek legal advice when necessary to ensure compliance.


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