Limited Company Responsibilities

Find out more about the legal responsibilities of running a limited company with help from Company Formations 24.7, an expert UK-based formation company.

As company director, it is up to you to oversee the running of the business, and that means meeting the many required limited company responsibilities, especially where preparing and filing official documentation is concerned.

Below are some of the foremost limited company responsibilities, along with further guidelines about how to go about fulfilling them.

Annual return

The responsibility of preparing and filing the company’s annual return falls to you as director. This return provides a summary of your company’s information, such as shareholders and directors, but it is not a financial summary. Fiscal information is detailed in the annual company accounts, which are separate.

You must file your annual return through Companies House, the fee for doing so online being £13, or £40 if filed on paper. More information on how to prepare and file an annual return can be found here.

Annual accounts

Your annual accounts detail the profit, expenses and other financial details of your company accounts.

Companies House requires an abbreviated set of accounts, while HMRC requires a fully prepared set of accounts that includes a director’s report, and a profit and loss account report. At this time, you’ll also need to file a CT600 Corporation Tax return with HMRC. As this has the potential to be a complicated process, it is recommended that you work with an accountant to fill in this form correctly to avoid any penalties.

More information on how to prepare and file annual accounts can be found in our Corporation Tax Guide.

Self-assessment

As part of fulfilling the limited company responsibilities, a company director must file an annual self-assessment. If staff are employed, the director should also ensure that annual employer returns are filed.

Under the PAYE scheme (also called Real Time Information, or RTI), employers (directors) are obligated to report this payroll information to HMRC online on or before each pay run.

VAT returns

If your business meets the VAT threshold, it is your responsibility as director to register for VAT returns, and ensure these are filled out and filed quarterly.

It’s important to note that you must register for VAT if your business turnover has met the threshold within the past 12 calendar months, not the previous accounting year. You can set up and file your accounts online, and must do so in a timely manner to avoid incurring fines and/or penalties.

Failing to submit any of the aforementioned returns can result in not only interest charges being levied, but also fines and penalties being administered by Companies House and/or HMRC. These two branches of government are separate, and so you can encounter difficulties with both of them at the same time.

Closing the company

If you close your company, you cannot simply stop trading. You have a responsibility to notify Companies House and HMRC of the change, and follow a process that involves paying off all debts, cancelling your VAT registration, paying outstanding PAYE and NIC contributions, running your final payroll and obtaining P45s for yourself and employees, and submitting a P35 Employer Annual Return along with the final accounts.

In summary

Ensuring that the business operates legally, and that you as director are able to manage and meet the tax and financial liabilities of your business, are arguably two of the most important limited company responsibilities. Working alongside experts such as formation agents, accountants, consultants and auditors at various stages of setting up and running your limited company can not only save you time, money and stress, but can also play a pivotal part in ensuring that your company remains compliant in the eyes of the government.

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