DIRECTORS’ DUTIES
Main statutory duties
MA 3 and 5: Give directors power to manage the company.
S.170:
(1) Owed by director to the company.
(2) Ex-director bound by S.175 (conflict) and S.176 (third party benefit) even after termination.
(5) Duties also apply to shadow directors
S.171: Act within powers
S.172: Promote the success of the company for benefit of the members as a whole
S.173: Exercise independent judgement
S.174: Exercise reasonable care, skill and diligence
S.175: Avoid conflicts of interest ((3) – only applies if D is a D of both companies)
S.176: Not to accept benefits from third parties
S.177: Declare interest in proposed transaction
Remedies:
- Injunction
- Setting aside the transaction, restitution and account for profits
- Restoration of company property
- Damages (only remedy for S.174 reasonable care, skill and diligence)
Consequence:
- Termination of service contract under Company Directors Disqualification Act 1986
Public Disclosure
Disclosure of details of Directors and Secretaries
- S.162 (director) and S.275 (secretary): Must keep a register at registered office, notify of changes and
keep available for inspection by members without charge (others can charge fee).
- S.163(1) (director) S.277(1) (secretary): Particulars must include name, service address, country of
residence, nationality, occupation and date of birth for directors and name and address for secretaries.
o Previously had to use residential address and apply for confidentiality order from S of S to hide.
o S.165: D must provide their residential address to be kept on a separate, secure register.
- S.164 (director) and S.278(1) (secretary): If the director or secretary is a company then must record
corporate name and registered office.
- S.167 (director) and S.276 (secretary): Must notify of change in particulars within 14 days using forms:
o AP01 for appointment of D
o TM01 for termination of D
o CH01 for changes in details
Disclosure of benefits in Annual Accounts
- S.412: Must disclose remuneration: salaries, bonus, pension and compensation for loss of office,
applies to a connected person or company controlled by D.
- S.413: Must disclose details of advances / credits given or guarantees entered into by the company on
behalf of a D – applies to anyone who was a D during the financial year.
- S.423(1): Annual accounts must be sent to every member (can then remove if unhappy).
Disclosure of service contracts
- S.227: Wide definition of what constitutes a ‘service contract’ – any terms of appointment or services.
- S.228: Must keep copy of all service contracts (or written memoranda setting out terms if not in
writing) available for inspection and retain for at least 1 year after termination.
- S.229: Open to inspection by every member without charge and right to request copy for fee.
Disclosure of QTPIP and QPSIP in Director’s Report
Main statutory duties
MA 3 and 5: Give directors power to manage the company.
S.170:
(1) Owed by director to the company.
(2) Ex-director bound by S.175 (conflict) and S.176 (third party benefit) even after termination.
(5) Duties also apply to shadow directors
S.171: Act within powers
S.172: Promote the success of the company for benefit of the members as a whole
S.173: Exercise independent judgement
S.174: Exercise reasonable care, skill and diligence
S.175: Avoid conflicts of interest ((3) – only applies if D is a D of both companies)
S.176: Not to accept benefits from third parties
S.177: Declare interest in proposed transaction
Remedies:
- Injunction
- Setting aside the transaction, restitution and account for profits
- Restoration of company property
- Damages (only remedy for S.174 reasonable care, skill and diligence)
Consequence:
- Termination of service contract under Company Directors Disqualification Act 1986
Public Disclosure
Disclosure of details of Directors and Secretaries
- S.162 (director) and S.275 (secretary): Must keep a register at registered office, notify of changes and
keep available for inspection by members without charge (others can charge fee).
- S.163(1) (director) S.277(1) (secretary): Particulars must include name, service address, country of
residence, nationality, occupation and date of birth for directors and name and address for secretaries.
o Previously had to use residential address and apply for confidentiality order from S of S to hide.
o S.165: D must provide their residential address to be kept on a separate, secure register.
- S.164 (director) and S.278(1) (secretary): If the director or secretary is a company then must record
corporate name and registered office.
- S.167 (director) and S.276 (secretary): Must notify of change in particulars within 14 days using forms:
o AP01 for appointment of D
o TM01 for termination of D
o CH01 for changes in details
Disclosure of benefits in Annual Accounts
- S.412: Must disclose remuneration: salaries, bonus, pension and compensation for loss of office,
applies to a connected person or company controlled by D.
- S.413: Must disclose details of advances / credits given or guarantees entered into by the company on
behalf of a D – applies to anyone who was a D during the financial year.
- S.423(1): Annual accounts must be sent to every member (can then remove if unhappy).
Disclosure of service contracts
- S.227: Wide definition of what constitutes a ‘service contract’ – any terms of appointment or services.
- S.228: Must keep copy of all service contracts (or written memoranda setting out terms if not in
writing) available for inspection and retain for at least 1 year after termination.
- S.229: Open to inspection by every member without charge and right to request copy for fee.
Disclosure of QTPIP and QPSIP in Director’s Report
