UK Shareholders and Directors responsibilities for a private Limited Company

Dec 17, 2016
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United Kingdom
I have been looking to find some information with regard to responsibilities of Shareholders of a private Limited Company but all I could find was just about Directors responsibilities. There are cases when owners of a small private Limited company composed of one director and few shareholders ask about who will be held responsible if company is found not to be satisfying tax office requirements. As far as I have been researching I could find out that it is Directors responsibility to lead the company according to rules and regulation. However, shareholders will be asking if they can be held responsible for any mistake that Director could be making. Could anyone explain more what the regulations are regarding this matter.



VIP Member
Aug 26, 2011
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Limited companies are separate legal entities to the people who own them. However, as a company cannot function without humans running things, directors are appointed. As you rightly state, the directors have many responsibilities and can be held to account by the company in certain circumstances. The shareholders are not held to the same standard, although if (for example) there was a compulsory winding up order (eg to satisfy a creditor) then shareholders could end up bearing a financial responsibility. Their liability is limited, though, as the company is a separate legal entity.

I should add I am not a lawyer, this is just my rough understanding of the situation!

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