All directors have duties which they must comply with. These are set out within the Companies Act 2006 and include the following:
- Duty to act within powers (Section 171)
- Duty to promote the success of the company (Section 172)
- Duty to exercise independent judgment (section 173)
- Duty to exercise reasonable care, skull and diligence (Section 174)
- Duty to avoid conflict of interest (Section 175)
- Duty not to accept benefits from third parties (Section 176)
- Duty to declare interest in proposed transactions or arrangements (Section 177)
The above are what is known as “statutory duties”. There are also “common law” and “equitable duties” which directors must comply with, such as ensuring that regular financial accounts are filed, paying any tax liabilities of the company, updating HMRC and Companies House in relation to any changes in the information it holds about the company and its directors, arranging general meetings and board meeting and much more.
If it transpires that a director does not comply with his or her duties, he or she could not only become personally liable for losses suffered but also risk prosecution, disqualification and more.
The risks for directors is huge and so it is important that you do not delay seeking crucial advice. Our expert team at Summit Law LLP have extensive experience in assisting directors and are more than happy to assist you.