What a UK director is responsible for

Being a director of a UK company is a personal legal role, not a title. The Companies Act sets out seven general duties, and they are owed to the UK company itself. That is the part group executives find counter-intuitive: the parent appointed you, the parent pays you, and your duty is nonetheless to the subsidiary. Where the two conflict, and in a group they eventually do, the duty runs to the company.

The seven duties

1. Act within the powers the company's constitution gives you.
2. Promote the success of the company, having regard to its employees, its business relationships, its impact on the community and environment, its reputation, and the need to act fairly between members.
3. Exercise independent judgement. Voting as instructed by the parent, without applying your own mind, is the duty most obviously at risk in a subsidiary.
4. Exercise reasonable care, skill and diligence, judged against both what a reasonably diligent person would do and against your own actual knowledge and experience.
5. Avoid conflicts of interest.
6. Do not accept benefits from third parties.
7. Declare any interest in a proposed transaction with the company.

Where personal liability bites

Directors can be personally liable for filing failures, for unpaid tax in defined circumstances, and, most seriously, for continuing to trade when they knew or ought to have concluded the company could not avoid insolvency. For a subsidiary funded by a parent, that last one is live: a letter of support from the parent is what usually allows the directors to keep trading, and it needs to be genuine, current and in writing. Directors are also personally responsible for the company's filings being made, so a subsidiary with no UK finance person is a risk to the individuals, not just to the company.

Shadow directors

Where head office executives often direct the UK board and the board simply does as it is told, those executives can be treated as shadow directors and pick up a director's duties and liabilities personally, without ever being appointed. The protection is structural rather than cosmetic: put the parent's control in the articles and a shareholder agreement as reserved matters, and let the UK board take the decisions in front of it. That also protects the company's UK tax residence, because a UK company whose decisions are all made abroad can have its residence challenged.

Identity verification

Since 18 November 2025 every director and person with significant control must have their identity verified by Companies House before appointment, through GOV.UK One Login or an authorised agent. Unverified directors cannot make filings and can be fined. We handle it for each appointee.