There are now seven general duties, which are as follows:
(a) Duty to act within your powers
(b) Duty to promote the success of the company
(c) Duty to exercise independent judgment
(d) Duty to exercise reasonable care, skill and diligence
(e) Duty to avoid conflicts of interest
(f) Duty not to accept benefits from third parties
(g) Duty to declare an interest in a proposed transaction or arrangement
Many directors do not realise that when they stop being a director, some of these duties can continue; for instance, the duty to avoid conflicts of interest. It, therefore, follows that where a director breaches his duties, it is the company that brings the action against the director.
As a commercial law firm we can call upon our commercial litigation solicitors or our employment lawyers to deal with advising companies who wish to bring a claim or directors who are being pursued. Normally where a director is accused of breaching his duties, there can be many inter-tangled issues such as the dismissal of the director and the possible sale of his shares.
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