BLAW211: Directors' Duties
s131
Act in Good Faith and best interests of company
s135 Reckless Trading
director must not cause, allow or agree to the business of company being carried on in a manner likely to create a substantial risk of serious loss to company's creditors
(net deterioration)
s136 Incurring Obligations that Cannot be Performed
director must not agree to the company incurring an obligation unless the director believes at the time on reasonable grounds that the company will be able to perform the obligation when required
s137 Care of a reasonable director
director must exercise the care, diligence and skill that a reasonable director would exercise takling into account nature of the company, decision and director and their responsibilites
s139 Interested Directors
Director interested (conflict) if: may derive material benefit from transaction, material finc interest in another party, director of another party who will dervice mat finc ben, if partner, child, spouse, etc of party who will derive mat finc ben. if otherwise directly or indirectly interested
s140 - 144
- if director is interested, must make disclosure to the Board
- must be noted in the Interests Register
- if failed to disclose, company can within 3 months, avoid transactions where director is interested but if they received fair value. If it is set aside, third party interests are protected
s146 Relevant Interest in Share Dealing
if: beneficial owner of share, any right to vote attached to the share, or control the exercise of any right to vote, can acquire or dispose the share or control this; OR under any trust, argmnt, arngment or undrstndng: have the power to do any of the above
s148
director must immedately after acquistion/disposition disclose to the Board: number and type of shares, nature of interest, consideration, date of ac/dis
s149
if director has price sensitive info i.e inside info:
must: receive on dispo not less than fair value on shares,
and pay not less than fair value for any shares received
s145 Use of Company Information
director may not use comp info which would otherwise not be available unless it is: for the purpose of the comp, required by law, complying with the act to do with disclosure of interest, disclosing to a person who dir takes instrctn frm
s133
Duty to exercise powers for a proper purpose
Duties owed to Shareholders
- supervise share register
- disclose interests
- disclose share dealings
s138
Use of Info and Advice
Directors may rely on reports, statements, finc data
Given by: employees, pro advisers, and other directors
does not negate the need for proper enquiries
s380
Carrying on business fraudulently. Anyone knowlingly in a party intending to defraud creditors is liable. Every director who induces a person to give credits or gives/transfers/causes a charge to be given on prop of company or causes prop to be transfered to anyone, IS LIABLE
Offence against s380
liable to imprisonment for a term not exceeding 5 years or to a fine not exceeding 200k
s138A
offence for serious breach of directors duty to act in good faith and in best interests of company