How many directors for a limited company?

justintime999

Hi

How many directors can I have for a limited company? Can each director receive a salary for being a director or do they have to do a specific job like be a manager?

Thank in advance.

da_rule

You can have as many directors as you want.

Directors are strictly not employees they are officers of the company (office holders). You can pay them (in accordance with their service contract), however they are responsible for their tax arrangements (completing self assessment etc).

If they are also shareholders then they may have extra liability for any tax on dividends.

In reality, do you need a lot of directors? You can have one director who delegates powers to employees (such as an I.T. Manager being given decision making powers for I.T. related issues). As employees you could then pay them through PAYE which may make their tax affairs easier.

prowla

One or more.

Aquamania

justintime999 wrote: »

Hi

How many directors can I have for a limited company?

At least one. There is no upper limit.

justintime999 wrote: »

Can each director receive a salary for being a director

Yes, but it is not mandatory

justintime999 wrote: »

or do they have to do a specific job like be a manager?

Thank in advance.

They are doing a specific job like a manager - they are directing the activities and running of the business on hehalf of the owners (shareholders)

justintime999

That's some great answers. Thanks.

I was asked by a friend to be a company director to protect his business in case of divorce. Is that even true?

Is it a good idea for me as my tax bill will go up? Or do I "chose" my own salary say £1,000 per year? Or doesn't it work like that?

Savvy_Sue

I'd be a bit wary of this: I can't comment on the 'protection in case of divorce' issue, but being a company director does come with certain responsibilities. If you're not active within the company, the other director(s) could act improperly, but you'd also be liable, even if you didn't know what was going on.

There are a few threads about people resigning directorships because it's all gone a bit wrong, and the implications of that.

CKhalvashi

justintime999 wrote: »

That's some great answers. Thanks.

I was asked by a friend to be a company director to protect his business in case of divorce. Is that even true?

Is it a good idea for me as my tax bill will go up? Or do I "chose" my own salary say £1,000 per year? Or doesn't it work like that?

As a director, you can choose your own salary.

With the divorce case, it's usually a case of shareholding rather than direcorship, however there are various simple/legal ways around this (which I won't go into for obvious reason), with no need for any 'creative' accounting.

CK

princeofpounds

Don't be a director of a company that you aren't actually going to direct.

As mentioned above you will carry liability for many of the things that company does.

The board of directors is basically a committee that supervises the running of the company and the appointment for management on behalf of the shareholders.

Some of those directors may be managing directors (aka executive directors, aka various other terms) who also hold executive posts in the company (such terms as MD, CEO, CFO etc.).

Some may just be directors (aka non-executive directors), who have no executive functions and are really just there to supervise/consult/advise/question/appoint for the shareholders. Often they are the shareholders, but not necessarily.

And in larger companies you may get independent directors, who are not officially responsible to any particular shareholder or part of management, rather the general well-being of the company. This is particularly the case in large companies or companies with lots of small shareholders. They often run sensitive things like the audit and executive compensation process.

But that's all a bit theoretical. Suspect your mate just wants you on the board to be a stooge in case he needs to prove something.

https://www.gov.uk/running-a-limited-company

colino

If it is just an unsupported (your not investing and getting a true share-holding) ruse to sidestep his divorce liabilities, tell him to do one and pick your friends better.