Directors’ duties can be a complex area to understand. Company directors are under an obligation to comply with fiduciary duties and statutory duties.
BizSmart Select Member, Katherine Hall of Bradley Haynes Solicitors explains
Listen to the webinar for a general overview of directors’ duties for directors of limited companies, or read on for a brief summary.
Summary of Directors’ Duties
Often when a person is made a director of a limited company, they are not aware of the duties that they must comply with under English law.
The Companies Act 2006 specifically sets out seven general duties. However, it is important to note the list of statutory duties codified within the Companies Act 2006 does not include all the duties a director can potentially owe to his or her company.
The seven general duties, which the webinar covers in more detail, are as follows:
- Duty to act within powers (section 171 CA 2006)
- Duty to promote the success of the company (section 172 CA 2006)
- Duty to exercise independent judgment (section 173 CA 2006)
- Duty to exercises reasonable care, skill and diligence (section 174 CA 2006)
- Duty to avoid conflicts of interest (section 175 CA 2006)
- Duty not to accept benefits from third parties (section 176 CA 2006)
- Duty to declare an interest in a proposed transaction or arrangement (section 177 CA 2006)
There are various types of directors, and it is possible to act in a way which could result in liability for fulfilling the duties of a director even where a person is not officially appointed as a director.
Statutory duties may arise in other areas, as additional duties arise under statutes that apply to almost all businesses, including tax, employment and health and safety and also under those that might apply specifically to a company’s area of business activity.
Directors should seek personal legal advice if they have any concerns or queries in regards to their duties as directors.
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