Get in Touch Menu

Directors’ duties – a brief reminder

07 December 2013

Our corporate & commercial team reminds directors of their responsibilities through this Q&A.

I am the sole director and shareholder of my company. Surely the only duty I owe as a director is to myself?                 

No. All directors are personally subject to statutory duties as set out in the Companies Act 2006. These duties are owed to the company itself and can also extend to shareholders, creditors and employees. In addition, all directors are responsible for ensuring that the company complies with its statutory obligations.

What are the main duties?                                         

The main duties are to:

  • promote the success of the company for the benefit of its shareholders;
  • exercise independent judgement;
  • avoid any conflict of interest;
  • exercise reasonable care, skill and diligence;
  • not accept benefits from third parties;
  • act in accordance with the company’s constitution; and
  • declare an interest in a proposed transaction or arrangement.

Is that all?                                             

No. A number of common law (non-statutory) duties also still apply. These include a duty to not misapply company property, a duty of confidentiality and a duty not to cause the company to exceed its powers.

What if I get it wrong or don’t declare an interest?

Directors may incur personal liability, both civil and criminal, for their acts or omissions. Under the Insolvency Act 1986 it is possible for a director to be made liable for the company’s debts. Criminal offences for directors have been created under several statutes (including corporate manslaughter) and in some circumstances a director can be disqualified from acting as a director in the future. It is therefore very important to take advice if you are in any doubt about your duties in any particular situation.

Do you have any other questions? If so, do not hesitate to contact our expert corporate & commercial team. We’d be delighted to help.

Contact us

Our corporate & commercial team is rated by national legal guides The Legal 500 and Chambers UK. The department’s expert lawyers can help businesses big or small on a variety of corporate challenges that may arise.

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Related services
Share this article
Resources to help

Related articles

Changes to company law – what businesses need to know


This week, initial changes to company law – including the biggest changes to Companies House since it began – will start to take effect. Here, our corporate and commercial team…

Chris Wills LLB (Hons)

Unearthing the implicit duty of cooperation in commercial contracts


In the world of business, contracts are the bedrock upon which deals are built. These carefully crafted documents are a testament to the mutual understanding between parties, outlining their respective…

Richard Holland BA (Hons)
Senior associate, solicitor

Why sole director companies should check articles of association


A recent case has highlighted the importance of ensuring a company is incorporated with carefully drafted articles of association, if there is only one director. All limited companies must have…

Helen Howes LLM
Associate, solicitor
Contact us