Advice for directors

COMPANY DEBT ANALYSER

When you start your own company you may be needed some advice to help you through the initial stages, especially if it’s your first business. You should be aware that there are some primary steps that need to be taken when setting up a new company.

Becoming a Company Director

If you choose to form a limited company, you must designate at least one director. If your company only has one director, the company director must be different from the company secretary. If you have at least two company directors, one of the directors may be appointed as the company secretary. The decision on who runs the company is generally a decision made by the members.

Who is Permitted to Become a Director?

When deciding who will be the director of your UK based limited company, you may wonder if there are any restrictions on who is legally allowed, and who isn’t.

In general, there are very few restrictions in place for anyone wanting to become a limited company director.
The factors that may restrict someone from being appointed as a limited company director by its members are as follows:

  • Anyone who has been disqualified from becoming a company director by a court, unless the court has allowed permission (leave) to do so on behalf of a company.
  • Anyone who is an undischarged bankrupt, unless with permission from the court.
  • Anyone below the age of 16 in Scotland.
  • Anyone above the age of 70 for a Public Limited Company (PLC), or their subsidiaries, unless a general meeting forms a general approval.

Company Ownership

Businesses with more than one owner are strongly advised to form an agreement between the partners and the shareholders.
It is considered good practice to put into place an arrangement which can prevent any future disputes, and also clarify working practices.

Business Administration

Setting out the rules which will govern your company’s management from top to bottom, including a thorough delegation of procedures, should be arranged from the outset. Companies will often go for years without anybody questioning the procedures, but if a disagreement arises or one of the owners wants to sell their share, or perhaps a new investor is keen on joining the business in some capacity, it’s vital to have the right procedures already in place.

Financing Your Business

Every company needs some form of financing to get started, but finding the cash to provide an initial boost can be extremely difficult.

Whether you borrow from banks, friends or family, or look to attract outside investments, grants, government support or specialist business loans, you need to know you’re making the right decision for the future of your business, as getting off on the wrong foot could be the difference between success and failure.

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