The Companies Act 2006 codified the responsibilities of Director to their Companies. The Act means that Directors can be held personally liable to compensate the company for any loss suffered as a result of a breach of their “Directors’ duties”. Under certain conditions a Director may be liable to disqualification under the Company Directors Disqualification Act 1986.
It’s critical that Directors fully comprehend their responsibilities and possible liabilities under the Act.
Companies Act 2006 General Duties:
• A duty to act within powers,
• A duty to promote the success of the company
• A duty to exercise independent judgment
• A duty to exercise reasonable care
• A duty to avoid conflicts of interest
• A duty not to accept benefits from third parties
In some circumstances, a Director may remain liable under the Act even after they cease to be a Director and all of the general duties apply to non-executive and shadow directors, as well as Executive Directors.
Our lawyers can advise Directors on the implications of their responsibilities and provide legal representation should it become necessary.