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Director Duties

As a director of a limited company, the Companies Act imposes a fiduciary duty in respect of any actions you undertake.

The overriding principle is that you must act in the best interests of the company, its creditors, shareholders and stakeholders at all time.

It is expected that you are to act in good faith, and you have a duty to promote the success of the company.

If your company is facing financially pressure, it is important that you seek immediate advice, and act in a responsible manner. Should your company be at risk of insolvency, taking advice at the appropriate times, together with acting accordingly can potentially protect you from any claims against you personally.

Being a director of a company that enters insolvency is not an automatic offence, but any actions carried out by you in the period of your directorship will need to be considered by the appointed Insolvency Practitioner.

Examples of where claims may arise against directors for not acting appropriately are as follows:-

  • Wrongful trading – if you are to form the opinion that your company is at risk of insolvency, it is imperative that you obtain immediate advice. If it is considered that you knew or ought to have known that there was no reasonable prospect of your company avoiding insolvent Liquidation, then you may be held personally liable for any loss suffered by the company or creditors, as a result of you failing to act appropriately.
  • Misfeasance – often, these will be cases where the director has failed to act in good faith. Examples of such instances would be where a director has disposed of assets at an undervalue, or sought to prefer a particular creditor(s) over another.

Whilst these are worst case scenario examples, it is key that you understand your responsibilities as a director.  Worse case offence can result in personal liability, or in the most severe cases, a fine or imprisonment.

If your company is struggling financially, and you are unsure of the best course of action, please call our Insolvency Experts, who will be happy to assist.  We will seek to quickly obtain an understanding of your business and its issues, in order to advise on the moist appropriate course of action. Taking such advice will not only help you with dealing with your company’s affairs in the correct manner, but also mitigate any risk to you as directors, for failing to act responsibly.

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At the Insolvency Experts our sole aim is to rescue, recover and renew businesses that are in difficulty. We are specialists in corporate turnaround and help business overcome cash flow difficulties and other financial problems. Our experts:

  • Help you to take the appropriate steps to meet any impending deadlines
  • Have a long track record in helping companies in similar positions
  • Can help you take the best course of action, often using your assets to help you avoid additional cost

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Why Choose Us?

We understand you have already made every effort to avoid insolvency and day to day life is stressful at the moment. We can start immediately and quickly work with you through the process.

We see many examples of great businesses that have fallen on hard times or suffered through no fault of their own.

We understand that the company directors and shareholders have already tried valiantly to carry on trading, but circumstances dictate that this is no longer possible.

  • We Remove Stress
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  • We Are Cost Effective
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