Directors’ Duties


A series of duties has evolved over centuries of case law which is aimed at preventing, or at least providing recourse, to shareholders and companies for abuses by directors.


The Companies Act 2006 has for the first time set out the duties owed by directors to companies in full which make daunting reading.


Thankfully the Minister of State for Industry and the Regions has published the following guidance for company directors on their duties which makes significantly easier reading. 


She wrote that directors must:

1)          Act in the company's best interests, taking everything you think relevant into account;


2)          Obey the company’s constitution and decisions taken under it;


3)          Be honest, and remember that the company's property belongs to it and not to you or to its shareholders;


4)          Be diligent, careful and well informed about the company's affairs. If you have any special skills or experience, use them;


5)          Make sure the company keeps records of your decisions;


6)          Remember that you remain responsible for the work you give to others;


7)          Avoid situations where your interests conflict with those of the company. When in doubt disclose potential conflicts quickly; and


8)          Seek external advice where necessary, particularly if the company is in financial difficulty.


If you have time and would rather read the full text, turn to section 171 of the Companies Act, 2000



Tel: 01252 850058,  Mob: 07789 773 985 ,  email:

Lynda Lawson trading as Legal Services For Business is a sole practitioner authorised and regulated by the Solicitors Regulation Authority under number 515697.

VAT registration number 136070536.  The materials on this website are provided for general information purposes only and do not constitute formal legal advice.




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