Directors take care: new guidelines to help interpret two of the Companies Act statutory duties of directors

By Susan Way

We now have recent guidelines to help interpret two of the Companies Act statutory duties of directors: the s172 duty to promote the success of the company and the s171 duty to exercise powers for the purposes for which they were conferred.

In Hellard & Ors v Carvalho, the claimants were the liquidators of an insolvent company previously run by Mr Carvalho (C), its principal director. They brought proceedings under the ‘misfeasance’ procedure of the Insolvency Act 1986 for breach of duties and sought financial relief against C.

The judge found that C chose which creditors to pay and which to leave exposed to the real risk (as it turned out) of being left high and dry. It probably didn’t help C’s case that the payments included repayment of debts owed to his father, payments made to himself and to companies personally controlled by him and Christmas bonuses made to a key employee…

Click on the link below to read the rest of the Shoosmiths briefing.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Shoosmiths

  • Litigants in person: is the tide turning?

    Following the recession, legal aid cut backs and poor economic conditions have led to an increasing number of LIPs being seen in the courts as people struggle to pay for legal representation. 

  • Proposed changes to make fundraising easier

    The Government has proposed draft legislation which will relax the rules surrounding the holding of small lotteries for fundraising purposes. 

View more briefings from Shoosmiths

Analysis from The Lawyer

  • Hester: declined bonus worth almost £1m

    Pay checks

    Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future

  • high street 150

    Focus: Alternative business structures - Law and new order

    There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…


2 Colmore Square
38 Colmore Circus Queensway
B4 6BJ

Turnover (£m): 92.98
No. of lawyers: 393


  • Training Contract

    Edinburgh, Manchester, Birmingham, Nottingham, Northampton, Milton Keynes, London, Reading, Basingstoke, Solent | £ 24,000