Personal liabilities of directors Overview Becoming a director gives status and a direct impact on the strategy and success of a business. It is a criminal offence to contravene Section 21 and any person who does so may be liable to imprisonment for up to two years or to a fine or both.
The disclosure must be made at the meeting of board of directors.
The court has discretion to award damages in lieu of rescission where it considers it equitable to do so. Even if an officer or director makes what turns out to be a bad business decision, the law does not render the person liable unless that decision violates a specific duty imposed on the officer or director.
Evidence should consist of authoritative sources such as documents or extracts either from the Company's own records or, where appropriate, outside sources.
Criminal Liabilities The following offences should be considered: This note is a general summary. Articles of Association and Section of the Companies Act Certain key duties of directors have been placed on a statutory footing under the Companies Act the "Act".
But they will not be liable where they have acted bonafide and for the benefit of the company. Each director should appreciate that it is not possible to delegate legal responsibility and that he will remain liable for the Memorandum even if he has relied upon another to verify part of the Memorandum and notwithstanding that he may not have been involved in all stages of drafting the Memorandum.
Any person who "does any act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any relevant investments is guilty of an offence if he does so for the purpose of creating that impression and of thereby inducing another person to acquire, dispose of, subscribe for or underwrite those investments or to refrain from doing so or to exercise, or refrain from exercising, any rights conferred by those investments.
Breach of Section 21 has both criminal and civil consequences. See What obligations does a director have. For example, where the directors apply company property of their own benefit they are guilty of breach of trust.
These incidents also led to major changes in federal securities laws regarding the potential liability for officers and directors. All directors have the same duties, responsibilities and liabilities.
The directors incur no personal liability as all their acts are undertaken as agents for the company. No attempt is made to cover those common law or statutory duties or potential liabilities of directors which arise solely by reason of such persons being directors of a company.
A director must act honestly in the performance of his duties. The affected director must be held to account for such secrete profit and unnecessary benefits and may be sued by the company to recover such secrete profit and benefits.
The duties, responsibilities and potential liabilities of directors are onerous and the role should not be accepted lightly. Liabilities. A director may also incur personal liability under legislation relating to the company, since some legislation provides that not only is the company liable but also any director who knowingly authorised and/or allowed the default by the company.
Responsibilities And Liabilities Of Directors In Relation To The Publication Of A. The Companies Act, defines a director in section 2(34) as a director appointed to the board of a company.
A company is a juristic person and therefore needs an agent to act on its behalf. A director of the company plays the role of an agent and acts a trustee for the assets of the company.
The. Classifications Of Liabilities On The Balance Sheet Liability and contra liability accounts are usually classified (put into distinct groupings, categories, or classifications) on the balance sheet.
The liability classifications and their order of appearance on the balance sheet are. In default of disclosure, the director is punishable with a fine of Rs.5, besides vacating office. Liability of directors: The liabilities of directors may be discussed under three heads: 1. Liability to outsiders: The directors are not personally liable to outsiders if they act within the scope of powers vested in them.
Discover the duties, liabilities and rights of a company director under the Nigerian company law. This is the third of four articles summarising the general duties and potential liabilities of a director of an English private company (which is not in a group with a PLC).Liabilities of a director