Company directors not only have to think about running their business, boosting sales and maximising profits – they have a series of duties set down in the Companies Act which they need to comply with.
A director’s key duties are:
- not to accept benefits from third parties
- to act within powers
- to avoid conflicts of interest
- to declare interests in any proposed transaction or arrangement
- to exercise independent judgment
- to promote the success of the company
These are personal duties which a director owes to their company but which many be enforced against or breach of which may result in sanctions upon a director, even if the director controls the company.
Other legislation, such as environmental, insolvency, and health and safety laws, also impose duties on directors which can also to personal liability.
The onus on directors to act in compliance with certain legal obligations in a wide range of situations, and the consequences of not doing so, has increased in recent years. The Directors Disqualification Act, for example, can result in an individual being disqualified from acting as a director for up to 15 years.
Balancing legal compliance with the need to develop and manage a business in today’s competitive environment is not always a straightforward task.
Harnessing the capabilities of our commercial team with input, where needed, from our corporate and litigation experts, we can help to guide you and your co-directors on the right path, working to ensure compliance with the law without tying your business up in unnecessary red tape.
In instances where disputes over directors’ duties arise we can assist with clarifying the situation, outlining where each party stands in law and advising on the appropriate action where needed. That may result in proceedings but we aim to avoid these wherever possible.
We aim to make sure that complying with your directors’ duties is just a part of your business, not something which runs your business.
For more details on how we can help you, please get in touch.