Governance & regulatory
Under the Companies Act 2006, as a director you must:
- Act within your powers
- Promote the success of the company
- Exercise independent judgement
- Exercise reasonable care, skill and diligence
- Avoid conflicts of interest (a “conflict situation”)
- Not accept benefits from third parties
- Declare interests in proposed or existing transactions or arrangements with the company
The Companies Act 2006 imposes an array of other obligations on you as a director. Some are personal in
nature and are specifically addressed to the directors. Others arise from the responsibility of the directors to ensure that the company carries out its obligations (where both the company and the directors may face liability in the event of a failure.) Potential penalties depend on the specific obligation breached but typically involve a fine or rarely, for the most serious offences only, a criminal offence which may lead to imprisonment.
Probably the most significant are the duties of the directors relating to:
- circulation and
- filing of the company’s annual reports and accounts
where many of the obligations fall directly on the directors.
Some other key obligations relate to the restrictions and conditions placed on transactions between a director and his or her company and loans made by the company to a director.
Being a director brings with it a high degree of responsibility and, increasingly, the risk of personal liability. Directors are not generally personally liable to third parties, unless they have given a personal guarantee for the liabilities of the company. However, various statutes have imposed personal liability on directors in a wide range of situations, including health and safety, environmental, competition and securities matters.
"Long-established practice with a diverse client base of SMEs, listed companies and private corporates. A close national network allows the firm to help clients in London and across the UK. 'Client service is their priority. They give a full, all-round service covering all elements of the transaction.'"
Company secretarial services
When it comes to corporate governance, Company directors should not be lulled into a false sense of security. Although private companies are no longer required to have a company secretary, this does not mean that the responsibilities that came with the role have disappeared.
Company directors can be fined and face criminal prosecution for failure to comply with the administrative, disclosure and filing requirements of the Companies Act 2006. For example, a failure to file an annual return will mean that every company director is liable, on summary conviction, to a fine. Whilst you are busy running your business, this is a pressure that you can probably do without!
Wright Hassall provides company secretarial services making sure that clients complete their statutory responsibilities whilst removing the administrative burden this brings.
Our company secretarial team can:
- Organise board meetings
- Collect, organise and distribute information,documents or other papers required for meetings, including proxy forms and members’ resolutions, and ensure that all board meetings are minuted
- Assist with payments of dividends
- Advise on directors’ duties
- Provide guidance on your company’s articles of association
- Provide information and disclosure to directors and shareholders
- Keep the statutory and minute books up to date
- Ensure the correct filings are made at Companies House in a timely manner
Bribery Act Training
The Bribery Act 2010 received Royal Assent on 8 April 2010. The Act created offences of offering or receiving bribes, bribery of foreign public officials and creates a new offence under section 7 which can be committed by commercial organisations which fail to prevent persons associated with them from committing bribery on their behalf.
We regularly work with organisations to deliver in-house Bribery Act training which explains:
- What is a bribe and why was the legislation introduced
- What are the key issues and what is the scope of the Act
- What offences are covered by the Act
- Are there criminal sanctions?
- The Offences in more detail: General offences, Discrete offence, Corporate offence
- Are there any defences to the offences?
- Criminal penalties in more detail: penalties for organisations, for individuals and for senior officers
- What are the key risk areas and what should you be doing to address them
By the end of the training, delegates will have an overview of the steps which their organisation should be taking to ensure compliance with the Bribery Act.
GDPR: General Data Protection Regulations
Despite Brexit, the Government announced on 24 October 2016 that the UK’s implementation of the General Data Protection Regulation (GDPR) will go ahead. Launching on 25 May 2018, GDPR not only builds on existing legislation but also brings specific and new obligations for organisations. It will be the biggest change in data protection law for 20 years, and you can find out more about how our expert data protection and privacy team are helping organisations in respect of GDPR here.
On 6 April 2016 Part 21A and Schedule 1A to the Companies Act 2006 (“CA 2006”) came into force.Read article