The breach of director’s duties or obligations set out in legislation or Common Law can lead to severe repercussions for the offending director, including imprisonment, heavy fines and award damages. The director may also become personally liable for company debts.
Our Bankruptcy & Insolvency Lawyers deliver quality and professional assistance and advice to directors facing litigation and subsequent legal action arising from the breach of director duties. Our Lawyers have also assisted companies, creditors and other entities, with taking legal action against directors for breach of duties.
The duties of directors are owed to the company in its entirety, and not to individual groups or stakeholders within a company. Some of the duties owed by directors to their companies include:-
- A duty of good faith and diligence;
- A duty to prevent insolvent trading;
- A duty to avoid conflicts of interest; and
- A duty to exercise powers for proper purposes.
Other than keeping to the director’s duties, directors are also expected to maintain proper records, attend board meetings and take an active role in the operation of the company.
Frequently, claims are made against Directors for Insolvent Trading, together with breaches of other Director's duties, either jointly and/or severally with the allegation of insolvent trading.
Serious consequences may arise where a director has been found to be in breach of the duties. Civil penalties of up to $200,000 may be ordered against directors. ASIC may also seek an order that a director be disqualified from being a company director for a set period of time. In addition to civil penalties, directors participating in dishonesty offences may face criminal penalties and gaol time.
Our Lawyers are familiar with litigation and proceedings involving the breach of director duties, having successfully acted for directors, creditors and other company stakeholders in the past.
Whether you are a Director of a Company and wish to seek legal advice about your position, or otherwise a person affected by the conduct of a Director and wish to seek legal advice about remedies and potential action that might be available for you to recover your damages or losses, Navado Lawyers & Solicitors can assist by properly assessing and considering all of the circumstances and the factual matrix, before providing you with specific legal advice.
If you need legal assistance in relation to a matter concerning Directors' Duties, you may wish to speak to a Bankruptcy & Insolvency Solicitor at Navado Lawyers & Solicitors. Our Sydney based Bankruptcy & Insolvency Lawyers can see you in our Sydney CBD head office.
This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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