29/07/2014

29/07/2014

The Companies Acts 1963-2009: The Principal Duties Of Company Directors

Company directors’ duties arise primarily from two sources; 1) common law and 2) statute (i.e. Companies Acts and other legislation e.g. EU Regulations).

1)       Common Law Duties

The common law duties of company directors can be summarised into three principals:
  • Directors must exercise their powers in good faith and in the interests of the company as a whole.
  • Directors are not allowed to make an undisclosed profit from their position as directors and must account for any profit which they derive from their position as director.
  • Directors are obliged to carry out their functions with due care, skill and diligence. However there is a provision whereby company directors are allowed to delegate duties to other officials of the company (e.g. to the company’s management).

2)      Statutory Duties

The position of company director holds a variety of statutory responsibilities which must be complied with to ensure that the company operates within the provisions of the Companies Acts 1963-2013. The principal duties are:

  • Duty as a company officer to comply with the Companies Acts.
  • Duty to maintain proper books of account.
  • Duty to prepare annual accounts.
  • Duty to have an annual audit performed.
  • Duty to maintain company registers and other documents.
  • Duty to file documentation with the Companies Registration Office.
  • Duty to disclose certain personal information.
  • Duty to convene general meetings of the company.
  • In addition to the above, the Companies Acts 1963-2013 also provides guidance on the duty of the director regarding transactions between the directors and the company, and duties when the company is in liquidation or insolvent.

Final Note

The above is intended to offer the reader a brief insight into the principal duties and obligations of a company director and is by no means exhaustive. The duties and obligations of a company director are discussed in detail in the Office of Directors of Corporate Enforcement’s Decision Notice D/2011/1 titled ‘The Principal Duties and Powers of Company Directors under the Companies Acts 1963-2009’.

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