By Alex Jay, Jane Bates
Directors managing their company must do so in accordance with the company’s articles of association and ensure that the company complies with its numerous statutory obligations. But there are also certain general statutory duties, the aim of which is to protect shareholders, which directors are personally subject to in managing the affairs of the company, and with which they must also comply.
Breaches of these duties can be ratified by the company. In the absence of such ratification, the company, or in limited circumstances the shareholders by way of derivative action, can take proceedings to enforce the duties owed to the company. Civil proceedings can be brought to stop further breach (by way of injunction) and to set aside affected transactions, restore company property, seek an account of any personal profits made by the director, or recover damages.