A company director is the person legally responsible for running a limited company and making sure it meets its legal duties. Every private limited company must have at least one director, and at least one director must be a real person (a "natural person"). Directors must be aged 16 or over, must not be disqualified and, since 18 November 2025, must verify their identity with Companies House (existing directors by the company's next confirmation statement). A director is not the same as an owner. Shareholders own the company, while directors manage it on the shareholders' behalf. In most small companies the same people do both.
What "company director" means in law
The Companies Act 2006 treats directors as the company's officers, the people through whom a company, which exists only on paper, actually acts. They make decisions as a board under the company's articles of association. They can bind the company to contracts and are accountable for its compliance. The title on a business card is not what counts. Section 250 defines a director as "any person occupying the position of director, by whatever name called". Equally, a "director of sales" who is not on the Companies House register is an employee with a job title, not a statutory director.
The minimum numbers are set by statute. A private company must have at least one director, and a public company at least two. A company must have at least one director who is a natural person, so a board made up entirely of corporate directors is not permitted. There is no requirement to appoint a company secretary in a private company.
Who can be a director
- Age. At least 16. Section 157 of the Companies Act 2006 prevents the appointment of anyone younger;
- Not disqualified. A person subject to a disqualification order or undertaking cannot act;
- Not an undischarged bankrupt, unless the court gives leave;
- Not the company's auditor;
- Identity verified. New directors must verify their identity before they can incorporate a company or be appointed to one. Existing directors confirm their verification when the company files its next confirmation statement during the 12-month transition that began on 18 November 2025. See GOV.UK's guidance on how to verify your identity for Companies House. Verification produces a personal code that is used for each role the person holds.
No formal qualification is needed. Directors must give Companies House a service address, which appears on the public register, and their home address, which is kept on a private register.
A director's legal duties
Sections 171 to 177 of the Companies Act 2006 set out seven general duties owed to the company:
- Act within powers. Follow the articles and use powers only for their proper purpose (s171);
- Promote the success of the company for the benefit of its members as a whole. In doing so, a director must have regard to long-term consequences, employees, relationships with suppliers and customers, the community and the environment, the company's reputation, and fairness between members (s172);
- Exercise independent judgment (s173);
- Exercise reasonable care, skill and diligence. This is judged both by what can reasonably be expected of anyone in the role and by this director's actual knowledge, skill and experience (s174);
- Avoid conflicts of interest (s175);
- Not accept benefits from third parties because of being a director (s176);
- Declare an interest in any proposed transaction or arrangement with the company (s177).
Alongside the duties sit practical obligations. A director must keep company and accounting records, prepare and file annual accounts, and file the Company Tax Return. They must keep the information at Companies House correct and file a confirmation statement every year. They must also make sure corporation tax, VAT, PAYE and National Insurance are paid on time. These tasks can be delegated to an accountant, but GOV.UK is explicit that the director remains "legally responsible for your company's records, accounts and performance". When a company is in financial difficulty, the focus shifts to creditors. Continuing to trade once insolvency is unavoidable can create personal liability (see wrongful trading).
When a director becomes personally liable
Limited liability protects shareholders, not directors who break the rules. The main routes to personal exposure are:
- Personal guarantees signed for loans, leases or supplier credit;
- Breach of duty, where the company (or a liquidator) can claim compensation;
- Wrongful or fraudulent trading in an insolvency;
- Disqualification. Courts can ban unfit directors for between 2 and 15 years. Acting while disqualified is a criminal offence carrying up to 2 years' imprisonment, a fine or both;
- Overdrawn loan accounts. Money taken from the company that is not salary or a lawful dividend becomes a director's loan. If it is not repaid within nine months of the year end, the company pays a section 455 charge of 35.75% on loans made from 6 April 2026 (see section 455 explained).
How directors are paid
A director's salary goes through PAYE like any employee's. For 2026/27, employee National Insurance applies at 8% above the £12,570 primary threshold, and employer National Insurance at 15% above £5,000. A director who is also a shareholder will often take a modest salary plus dividends. Dividends are taxed at 10.75% and 35.75% above the £500 allowance in 2026/27. A company may only make a distribution "out of profits available for the purpose" (s830). For how this compares with working for yourself, see sole trader vs limited company.
Appointing and removing directors
Directors are normally appointed by the board or the shareholders under the articles, and the appointment must be notified to Companies House. Shareholders can remove a director by ordinary resolution at a meeting under section 168, whatever any agreement says. Special notice is required, the director is entitled to be heard at the meeting, and any compensation claim the director may have is preserved. A director resigns by giving notice to the company. The company then updates the register. If the departure would leave the company with no director, the company must appoint a replacement.
Being a director is easy to take on and harder to do well. Acumon supports directors with board and statutory administration through our company secretarial services, and on remuneration, loans and filings through our accountants for limited companies team.