directors duties, directors defences and personal liability

1. 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

2. 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

3. 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