Company Director Duties

Setting up a business often involves forming a limited liability company.

Limited liability companies must have at least one (and more usually at least two) company directors.

The principal responsibilities of a company director are set out in Part 5 of the Companies Act 2014.

Section 228 of this act states:

1) A director of a company shall—

(a) act in good faith in what the director considers to be the interests of the company;

(b) act honestly and responsibly in relation to the conduct of the affairs of the company;

(c) act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law;

(d) not use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless—

(i) this is expressly permitted by the company’s constitution; or

(ii) the use has been approved by a resolution of the company in general meeting;

(e) not agree to restrict the director’s power to exercise an independent judgment unless—

(i) this is expressly permitted by the company’s constitution; or

(ii) the case concerned falls within subsection (2);

(f) avoid any conflict between the director’s duties to the company and the director’s other (including personal) interests unless the director is released from his or her duty to the company in relation to the matter concerned, whether in accordance with provisions of the company’s constitution in that behalf or by a resolution of it in general meeting;

(g) exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person having both—

(i) the knowledge and experience that may reasonably be expected of a person in the same position as the director; and

(ii) the knowledge and experience which the director has; and

(h) in addition to the general duty under section 224 (duty to have regard to the interests of its employees in general), have regard to the interests of its members.

In practice this means that company directors must ensure that the company

Keeps accurate books of accounts and files its statutory accounts in a timely manner

Ensures that it complies with the law in terms of its employees and its revenue liabilities for PAYE , VAT and other taxes to be paid

Stays within the law in terms of its trading and borrowing arrangements

We can provide more advice to you on the requirements , both legal and practical , of being a company director in Ireland

brendan@innovation21.ie

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Brendan Lawlor

Brendan Lawlor

Brendan Lawlor is a business consultant specializing in helping start-ups, spin outs from higher education institutions and companies focused on innovation , growth and exporting.

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