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Ask Alice H Your Own Question
Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2850
Experience:  Partner in national law firm
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What are directors duties?

Customer Question

What are directors duties?
Submitted: 1 year ago.
Category: Law
Expert:  Alice H replied 1 year ago.
Good morning. My name is ***** ***** I am happy of help you. Please could you explain your situation in a little more detail?
Customer: replied 1 year ago.
I am helping a friend who owns a double glazing company. I'm trying to promote his business by advertising and I made a website for him. I have incurred the advertising costs as well. He wants for me to become a director. Is director and owner 2 different things. Can I be co-owner as I'm putting my funds into developing his business or does being a co-director mean co-owner? Thanks
Expert:  Alice H replied 1 year ago.
OK. If this is a limited company, you can only be a director and/or shareholder; there is no scope for being a 'co-owner'. Becoming a director involves registered with Companies House and there are a number of legal obligations which you have to comply with which I have listed below (clicking each one will take you to the law). Being a Director is an important step and should not be ta***** *****ghtly because failure to act in accordance with the law could have serious consequences for your personally.The general duties171.Duty to act within powers172.Duty to promote the success of the company173.Duty to exercise independent judgment174.Duty to exercise reasonable care, skill and diligence175.Duty to avoid conflicts of interest176.Duty not to accept benefits from third parties177.Duty to declare interest in proposed transaction or arrangement
Expert:  Alice H replied 1 year ago.
Can I assist you any further with this matter?
Customer: replied 1 year ago.
What about remuneration? How do they get paid? Thanks
Expert:  Alice H replied 1 year ago.
A director is not an employee of the company but would enter into an agreement to provide services. Usually there would be an agreement for the director to receive monthly drawings plus dividends from shares. The practice for the directors to agree a contract and terms of remuneration. If their are other shareholders then there could be a meeting for the directors remuneration to be agreed.
Customer: replied 1 year ago.
Thanks. Who can draw up this contract and terms of remuneration? Is it best to go to a solicitor for this? And if so how much would they charge for this?
Expert:  Alice H replied 1 year ago.
No, it's not necessary to use a solicitor. You can get a straight forward template off the web for £50 but if you want one drafted a checked by a lawyer you would be looking st paying from £250 - £500 per document.
Expert:  Alice H replied 1 year ago.
You can buy a template from this online company who are very good and reputable: http://www.netlawman.co.uk/g/director-service-contracts
Customer: replied 1 year ago.
Thanks that was helpful. As a director am i responsible for part of the company's debts?
Expert:  Alice H replied 1 year ago.
Please review the additional services request for more Q&A time. Many thanks.
Customer: replied 1 year ago.
And if i put some of my finances to help develop the company does that make me a shareholder as well? How would that work?
Expert:  Alice H replied 1 year ago.
Can I assist any further?