Services for your business

Our highly experienced solicitors here at TWM are well versed on director’s duties and will be able to advise and guide you on all aspects of the statutory and fiduciary duties that directors owe to a company under the CA 2006. Whether this be standalone advice or part of a transaction, we can assist in providing practical and informed advice tailored to your needs.

Please contact us if you require assistance.

If a director has breached their duties, there are some protections available to the director which can be provided by a court or the company itself.

• Ratification – in certain instances, the shareholders may pass an ordinary resolution to ratify the breach of the director (although this is not an option if the director was dishonest or the act was unlawful or unauthorised). If the breaching director is also a shareholder, they will not be able to vote in this resolution, nor any connected persons.
• Indemnity – the company may be able to give the director an indemnity against liability incurred to a person who is not the company nor an associated company. The indemnity cannot extend to criminal proceedings resulting in fines and a fine by a regulatory body.
• Insurance – directors’ and officers’ insurance may be incepted by the company which can insure the directors against any liability arising out of exercising their duties.
• Court relief – court can grant relief, full or partial, from liability if the breaching director shows they have acted honestly and reasonably. This is normally a last resort for a director and they can bring this action prior to any proceedings being brought against them.

If a director has breached any one or more of its duties, the company may be able to bring a claim against the breached director and could seek:

• damages for the losses incurred as a result of the director’s breach;
• restoration of property that a director acquired as a result of a breach;
• restitution of any profits that the director made as a result of the breach;
• an injunction to prevent a continuing breach; and
• rescission of contracts that the director did not disclose their interest in.

Directors owe their statutory duties to the company and therefore by extension its shareholders. The company can bring a claim against the breached director and, in some circumstances, wronged shareholders may also be able to bring a claim in the name of the company or bring a derivative claim.

On insolvency of a company, the directors’ duties are also owed to the company’s creditors, and, on any decision-making, the directors also have a responsibility to act in the best interests of the creditors.