Directors Personal

Liability

s301 Companies Act—Failure to

comply with directors duties

s300 Companies Act—Failure to

keep proper accounting records

You should ALWAYS state the defences for directors found in s300(2)

Both these sections are always

considered if the company is go-

ing into liquidation

Directors Personal

Liability

Transaction that could create substantial risks of serious loss to

creditors breach of s135

Failure to comply with IRD requirements

Failure to meet the solvency test

Director lies when acting on behalf of his company

Commit Negligent Misstatements (eg. makes false

statements about profits)

Breach of intellectual property rights - eg. grain exporter case

Commits a negligent acts (causes damage to property)

Director (or someone else they have told to) to commit a

wrongful act

Fair Trading Act 1986—deceptive and misleading conduct—

false misrepresentation on behalf of their company

If they are involved in latent faulty defects in

buildings if they actually involved in the build-

ing work, supervision or other aspects of con-

trol over the building process

Broad scope of personal liability

for directors

Defences for

Directors

s300(2)

Director took all reasonable steps to secure

the compliance by the company (in regards

to record keeping & financial reporting

Director has reasonable grounds to believe

and did believe that a competent and reli-

able person was charged with the duty of

seeing that provision was complied with

and was in a position to discharge that duty

Defences for

Directors s138

Director may rely on documents and advice provid-

ed by professionals and experts in their roles as di-

rectors — the director must have acted in good

faith, made any appropriate enquiries and no

knowledge that the reliance is not warranted

S376—defence as the

director (BoD) took all

reasonable steps