Becoming a Director

H

HelenB

Guest
Hi

Could anyone please help me as I have myself in a spin. I work for a company that has recently appointed me as a Director. Its a large financial firm and Ive no worries about its financial status. However, naive as it may seem, I have no idea how this effects me or my rights, what I need to do, I recently received a Form 12 and completed that but I am pretty anxious as no-one has discussed this new appointment with me.Maybe they all assume I know but I dont!. My sister has told me it effects my prsi etc and that I should see this hitting my pay check. Ive noticed no difference and I was appointed about 2 months ago. She also advised me to put my apartment in my Dads name or something.
Im beginning to hate this new appointment and wish I wasnt appointed as one until I knew all the ins and outs.
The year end for the Company is April and I suppose Ill see those accounts. but any idea of how this effects me particularly when bonus time is in July. What am I entitled to or is there a minimum or do I just accept whatever, if anything, is given to me as a bonus.
Can anyone advise me or advise who I should speak with.

Many thanks
 
Being a director brings with it certain important responsibilities, especially in recent years when a stricter corporate enforcement regime came into being, and one should be arware of these before accepting the role. has some information on this topic and I'm sure that the CRO does as well but their website seems to be down at the moment. might also be of interest to you. To be honest, to accept a directorship without first knowing what this implies seems quite naive/foolhardy to me.

By "Form 12" do you mean a Revenue Form 12 tax return or something else? Did the company not apprise you of the implications of becoming a director? What is your normal working role and what type of company is it if you can divulge this information?

If you are unsure about the implications and your tax situation then you should talk to an independent, professional advisor and not act on possibly erroneous or half baked advice from others such as your sister.
 
Becoming a director has responsibilities and you should look up the CRO website to assess how it affects you. It will not affect your PRSI at all unless you receive a "directors salary". However, you really need to speak to your superiors to see what responsibilites attach to directorships in your company.

What you also need to be careful about is the enforcement end of it. If a company of which you are a director/shareholder does not file its annual return/accounts, then penalties become due and the CRO are cracking down on companies who are constantly late/fail to file their annual return.

I attended a seminar in the CRO last year in which they advised that they were going to assess the "worst" 5,000 companies for failing or constant lateness in filing annual returns which would lead to these companies being struck off. Each year 5,000 more companies will be examined until all companies left are compliant. It would also lead to disqualification of certain directors.

Part of my job involves assigning shelf companies to clients. Because of this, we need to hold a certain number of shelf companies on file, so members of staff are directors of the shelf companies until the companies are used. As such, members of our staff (including myself) are often directors of up to 10 companies at any given time. I look after the annual returns for all of these companies until the directorships are transferred.

As mentioned above, I hope the Form 12 you completed is for the Revenue Commissioners, as a Form 12 in Companies Office terms is part of the process for a liquidtion. Perhaps you mean a B10?

Hope this helps.

MandaC
 
These guys might offer some useful training or other information. However, I'd encourage you to ask the relevant questions within your own organisation. There are no dumb questions, except the ones that aren't asked.
 
Although the duties of director may be quite onerous they are not as daunting as some of the previous contributors make out.

Ignore your sister, she does not know what she is talking about. Your salary will only change if you have been granted 15% or more of the shares in the company. This is unlikely so your net salary will remain the same. Leave your house in your own name.

As Rainyday suggested go back to you superiors and ask them what your new role involves and what new obligations you have taken on.
 
Ham Slicer said:
Although the duties of director may be quite onerous they are not as daunting as some of the previous contributors make out.
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I disagree. Directors can be held personally responsible for issues relating to the business in which they are involved and I would consider this quite an onerous responsibility! I'm not sure if this is as a result of new legislation or simply the enforcement of existing legislation in recent years. Ultimately however, the duties and responsibilities of a director are serious and anybody who doesn't understand them or what their role as a director entails is on dodgy ground in my opinion.
 
Has anyone asked why the original poster was made a director, or has the poster thought to wonder why? There are many reasons awhy one may be approached to become a director, and while not all are sinister, some may be.....may be worth findong out...
 
Becoming a director of a company now carries serious responsibilities since the legislation changed a few years ago.
My advise is talk to your MD and ask for a meeting with your companies auditors so that they can brief you on your responsibilities and they will offer independent advise.
 
johnflan said:
ask for a meeting with your companies auditors so that they can brief you on your responsibilities and they will offer independent advise.
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Though if the auditors are being paid by the company for this meeting, then their advise will not be truly independent.
 
...but they will be bound by ethical regulations governing potential conflicts of interest designed to protect yourself and other stakeholders, not just the company itself.

That said, if any worry or doubt remains, get your own professional advice.
 
Unregistered said:
Has anyone asked why the original poster was made a director, or has the poster thought to wonder why? There are many reasons awhy one may be approached to become a director, and while not all are sinister, some may be.....may be worth findong out...
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Good point. Maybe HelenB can comment?
 
hi Helen,
I found this book in Easons (costs about 25euro). "Who'd want to be a Company Director" by Mark o Connell Published by First Law. Found it quite useful for explaining the various obligations which you are presumed inlaw to be aware of. It is concise and clear and may help. Also is the company a Limited company? Also be aware you can resign your directorship if you are uncomfortable. Has there been a history of director turnover?This would be a fair indicator if hidden issues. Generally directorships are offered as an incentive to ambitious people and a reward. They are useful tools for retaining staff and incentiviing employees. I have heard people recently turning down directorships because of some wariness of stricter corporate governance and responsibilities and obiously your remunerration should reflectt your new seniority and added duties.
 
For what it's worth that book is published by [broken link removed].

sim said:
Also be aware you can resign your directorship if you are uncomfortable.
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Only if the resignation would leave at least two other incumbent directors as far as I know. I know of two people who were sole remaining directors of a company, who had both left to take up employment elsewhere and wanted to resign their directorships but were unable to and were unable to liquidate the company either! They both sorted it out in the end but it was a sticky situation for a while...
 
Hi Clubman,
Just read the cover and it said first published by First Law limited but your link should make it easier for anyone to find if required.
Do you think non shareholding directorships are worth the potential hassle? My sister is a director in a couple of companies but with no shareholding and I feel it is of no real benefit because in my opinion if a company wants you as an employee you will still get same remuneration etc.
Do you know if a shareholder in a company is exposed to the same risks as a director?
 
sim said:
Hi Clubman,
Just read the cover and it said first published by First Law limited but your link should make it easier for anyone to find if required.
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Sorry - wasn't second quessing you but just found the link when I went looking for more info about the book.

Do you think non shareholding directorships are worth the potential hassle? My sister is a director in a couple of companies but with no shareholding and I feel it is of no real benefit because in my opinion if a company wants you as an employee you will still get same remuneration etc.
Do you know if a shareholder in a company is exposed to the same risks as a director?
Click to expand...

I'm not really au fait with all the details but, speaking personally, I would be inclined to only accept the role with companies in which I had a vested interest (if even then!) due to the responsibilities involved. I would certainly think carefully about taking on multiple directorships at any one time. By "couple" do you mean two? Or more? Why does your sister hold multiple directorshipes do you know?

I am certainly no expert in this area so don't take my comments as in any way authoritative!
 
Ham Slicer said:
Although the duties of director may be quite onerous they are not as daunting as some of the previous contributors make out.

Ignore your sister, she does not know what she is talking about. Your salary will only change if you have been granted 15% or more of the shares in the company. This is unlikely so your net salary will remain the same. Leave your house in your own name.

As Rainyday suggested go back to you superiors and ask them what your new role involves and what new obligations you have taken on.
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hi,
i am wondering about this 15% figure that you quote, why is this significent?
Slán
~M
 
sim said:
Do you know if a shareholder in a company is exposed to the same risks as a director?
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A shareholder (who is not a director/shadow director) in a private company has no other responsibilities than any other shareholder in Microsoft, BT, etc

[email protected]
 
hardiman said:
hi,
i am wondering about this 15% figure that you quote, why is this significent?
Slán
~M
Click to expand...
15% is the point where you are considered a proprietary director and have to fill out a Directors Form 12 every year. I'm not sure how it affects your salary but your PAYE tax credits will change (for the worse).
 
wowser said:
15% is the point where you are considered a proprietary director and have to fill out a Directors Form 12 every year. I'm not sure how it affects your salary but your PAYE tax credits will change (for the worse).
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You won't be entitled to the PAYE credit so that will change your tax.
 
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