What are my Responsibilities as a Director ?
As a company director in the UK, you’re guided by the Companies Act of 2006. While enjoying the protection that limited liability affords, directors owe a duty of care not just to the company, but also to its creditors and the wider public.
Failing in this fiduciary responsibility can lead to claims of misfeasance. If you have had a claim brought against you or think you may have some trouble in the future then do get in touch for a confidential chat to discuss your options.
Know Your Responsibilities
There are seven duties every director has to uphold
- Act within the powers granted to you.
- Promote the success of the company for the benefit of its members as a whole.
- Exercise independent judgement.
- Exercise reasonable care, skill and diligence.
- Avoid conflicts of interest.
- Not to accept benefits from third parties.
- Declare interests in transactions or arrangements with the company.
The Consequences
What can happen if I breach my directorial duties?
Removal From Office
Shareholders, if the majority agree when taken to a vote, can vote you out and have you removed as a director.
Personal Liability
The director could be held personally liable for any losses suffered by the company, its shareholders, or its creditors as a result of the breach.
Court Orders
The court may order the director to take various actions, such as repaying any misused company funds, restoring company property, or rescinding contracts entered into as a result of the breach.
Disqualification
The Secretary of State can disqualify the director from holding company directorships for a certain period if they are deemed unfit to be a director.
Criminal Fines
In serious cases, the director may face criminal fines, particularly for breaches involving fraud or dishonesty.
Imprisonment
In extreme cases, where the breach involves serious criminal activity, the director could even face imprisonment.
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