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Legal Risks, Obligations, Responsibilities for the "Finance Director"

Legal Risks, Obligations, Responsibilities for...

I understand some of the extra responsibilities around Directors who are actually designated as "Directors" in the company legal documents.

But what about the Finance Director?

I've been working with a small/medium and there has been some discussion around my possibly adopting the FD role/title.

But I got to thinking and was wondering if there there are any additional legal risks/responsibilities/obligations when adopting that title?

Does the FD need to be included in the legal documents?

Thanks very much in advance for your advice,

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06th Mar 2016 16:50

Finance Director

A person who becomes a director of a company has legal rights & obligations under company law & most likely also under the Articles of Association of the company in question.

A person who is described as "Finance Director" and who has, or appears to have, the knowledge & skills relevant to that role may be expected to have particular responsibility for the financial affairs of the company and. for example, its compliance with requirements in relation to annual accounts, legal dividends & solvency / insolvency issues.

For example if the company ended up in an insolvent liquidation & it was discovered that the company had continued to trade whilst insolvent & had improperly preferred some creditors over others then one might expect the liquidator / the government authorities to look particularly at the role the Finance Director had played.

Does that help?

If you are concerned about this you should seek advice from a solicitor with company law knowledge & experience.

David

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07th Mar 2016 08:56

A lot of people are described as "Director of" rather than Director. In the former case they needn't be on the legal papers however they should be aware of their responsibilities as possible shadow directors. Real Directors will be properly appointed on the appropriate form and the appointment registered at Companies House

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