Introduction
Director – Meaning & Definition
- There is no comprehensive definition of a director in statute.
- It means a person who is responsible for the management of a company.
Who cannot be a director
- Any person under 16 years of age.
- An undischarged bankrupt or person subject to a bankruptcy restrictions order.
- A person subject to a disqualification order or who has given a disqualification undertaking.
- A person who is the company’s auditor (if any).
Duties
- Act within power.
- Promote the success of the company.
- Exercise independent judgement.
- Exercise reasonable care, skill and diligence.
- Avoid conflict of interest.
- Not to accept benefits from third parties.
- Duty to declare interest in proposed transaction or arrangement.
Breach of Responsibilities
- The limited liability afforded by a limited liability company applies to its shareholders rather than its directors.
- Directors may be personally liable where they fail to meet their responsibilities.
- Breach of company law may be a criminal offence (e.g. failure in keeping company registers and making filings).
- Directors may be liable to fines under Electronic Communications (EC Directive) Regulations 2003 if they breach the marketing rules.
- A court may disqualify a person from being a director of a company under CDDA1986.