Recruitment for Directors

Welcome to episode 30 of Continuous Quality Compliance 

Today  I am talking about…  Recruitment for Directors 

CQC  are getting robust with their initial interviews and want to ensue that  the Directors you have in place are fit for purpose. They  have also asked for a Fir Director policy.  What I have done for clients is to take what Regulation 7 tells us plus what  Companies House recommend. 

I work with a lot of New business owners so todays episode is for going to be talking about what  the responsibility of a Director is ;

Directors’ responsibilities

As a director of a limited company, you must:

·       follow the company’s rules, shown in its articles of association

·       keep company records and report changes

·       file your accounts and your Company Tax Return

·       tell other shareholders if you might personally benefit from a transaction the company makes

·       pay Corporation Tax

·       You can hire other people to manage some of these things day-to-day (for example, an accountant) but you’re still legally responsible for your company’s records, accounts and performance.

Unfit conduct’ includes:

·       allowing a company to continue trading when it can’t pay its debts

·       not keeping proper company accounting records

·       not sending accounts and returns to Companies House

·       not paying tax owed by the company

·       using company money or assets for personal benefit

How disqualification works

The Insolvency Service may investigate your company (or you personally as a director of your company) if it’s involved in insolvency proceedings or if there’s been a complaint.

If they think you haven’t followed your legal responsibilities as a director, they’ll tell you in writing:

what they think you’ve done that makes you unfit to be a director they intend to start the disqualification process

how you can respond

You can either:

wait for The Insolvency Service to take you to court to disqualify you – you can defend the case in court if you disagree with The Insolvency Service

give The Insolvency Service a ‘disqualification undertaking’ – this means you voluntarily disqualify yourself and ends court action against you

You may want to get legal advice if you get a letter about disqualification from The Insolvency Service.

Apart from The Insolvency Service, other bodies can apply to have you disqualified under certain circumstances, eg:

Companies House

the Competition and Markets Authority (CMA)

the courts

a company insolvency practitioner

If you’re disqualified You’ll be disqualified for up to 15 years.

You can’t:

be a director of any company registered in the UK or an overseas company that has connections with the UK be involved in forming, marketing or running a company

other restrictions

There are other restrictions if you’re disqualified. For example, you might not be able to:

sit on the board of a charity, school or police authority

be a pension trustee

be a registered social landlord

sit on a health board or social care body

be a solicitor, barrister or accountant

If you look at all this you will see why it is important to have a robust process for incoming directors. You need to check them thoroughly and have a consistent process. When you are CQC regulated you also need to bring in the  criteria of Regulation 5 . So, ensure that you are meeting both  Companies house and CQC criteria.  

It is something that benefits the company . Directors are in a position of authority and responsibility so you want people who  are competent to do the job. 

If you think that as a sole Director of your own company it does not matter. Think again I have had a client in this position being asked how he is going to be held accountable and also if there is a complaint about home from  any client’s who will deal with it. He  has a member of staff who  he is happy to take on this role. Thinking through things like this is important. 

www.tchauhanconsultancy.co.uk

want a discovery call to see how I can help with this? Email taruna@tchauhanconsultancy.co.uk

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