As many of you already know the Companies act 1985 is being replaced by the new Companies Act 2006, in stages, but how many of you realise that this means company directors now more than ever before have their duties laid out, in law.
What does this mean? Simply put, a company director could now find him/herself exposed to greater potential liability than ever before, with a breach of duties bringing substantial claims against that individual.
Amongst the duties set out in the new act is that of to ‘promote the success of the company’ and to exercise ‘reasonable care, skill and diligence’, to ‘avoid conflicts of interest’ and not to ‘accept benefits from third parties’.
This is a departure from the previous act which only implied such duties, the new act has set them out in writing.
We may see directors in future seeking legal advice before accepting office.
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