Approach to costs
Solicitors at Humphreys & Co. always aim to approach
legal work in a financially-disciplined way. We offer
competitive rates. Our charging approach is both transparent
and geared to the options open to our clients. Our
solicitors generally charge by reference to time spent but
we can often agree fixed fees for specific work or in some
cases risk-adjusted funding structures.
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Directors'
duties
Solicitors advising
on directors' duties, claims for breach
of duty & defending applications for
disqualification orders
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Our solicitors supply advice to
directors on their rights and obligations as
officeholders in limited companies. Appointment as a
director should not be accepted without an understanding
of the duties existing under the Companies Acts, other
legislation and under the common law.
A director is usually an employee as well as a
officeholder and it is often prudent for the terms of
employment to be set out clearly in a written service
agreement or where the director is an independent
contractor in a consultancy agreement.
Solicitors here undertake litigation arising from claims
of breach of directors' duties and are experienced in
the defence of disqualification proceedings brought
against directors by the Department of Trade &
Industry.
Solicitors here advise commercial concerns of all
sizes on their corporate or partnership structure, on
start-ups and reorganisations, on acquisitions,
disposals and closure. The firm handles:
- company law and director
compliance
- shareholder arrangements
- new ventures and joint ventures
- buy-ins and buy-outs
- share and asset sales and
purchases
- finance
documents
Commercially focused and
fully transparent costings
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The duties of company directors
Once appointed a
company director becomes subject to various
duties which determine how they may or may not
act. The duties are intended to protect the
company and hold directors to account. Breach of
duty will lead to a director incurring liability
and action may be taken by the company (and in
limited circumstances by shareholders of the
company in a derivative action). Compliance with
the duties must therefore be taken very
seriously.
Prior to the Companies Act 2006, the
duties were set out in case law which derived
from the principle that directors are
fiduciaries of the company and owe it fiduciary
duties. These included duties to exercise skill
and care and duties to act in good faith and the
interest of the company.
The duties have since
been codified by the Companies Act 2006 and are:
- Duty to act within their powers
- Duty to promote the success of the company
- Duty to exercise independent judgment
- Duty to exercise reasonable care, skill
and diligence
- Duty to avoid conflicts of interest
- Duty not to accept benefits from third
parties
- Duty to declare interests
More than one of the duties may apply in a given
situation and it is therefore vital that steps
are taken to ensure compliance with all of them.
The remedies that are available to a company for
breach of the duties include:
- Payment of compensation by the director
- Account of profits from the director
- Return of company property
- Recission of a contract
- Injunction against the director
These remedies are intended to ensure that
proceeds breach of duty are returned to the
company. Failure of a director to declare
interests is also a criminal offence punishable
by a fine.
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Disqualification of directors
Under the Company
Directors Disqualification Act 1986 the court
has a discretion (and in respect of unfit
directors of an insolvent company a duty) to
make a disqualification order against a company
director which means that:
a) he shall not
be a director of a company, act as receiver of
a company’s property or in any way, whether
directly or indirectly, be concerned or take
part in the promotion, formation or management
of a company unless (in each case) he has the
leave of the court, and
b) he shall not act as an insolvency
practitioner.
The minimum (if any) and maximum periods of
director disqualification vary according to the
basis of the disqualification order but broadly
the length can range from 2 to 15 years. Factors
such as previous conduct and seriousness of the
current conduct of the director will be taken
into account in deciding the length of any
disqualification order. Failure by a director to
comply with a disqualification order is a
serious criminal offence carrying a maximum
prison sentence of 2 years and/or a fine. Leave
to act as a director during a period of
disqualification may be granted by the court if
it is satisfied that there is a need to grant
leave to that director and that if leave is
granted the public will remain adequately
protected.
The grounds on which a disqualification order
might be made against a director are:
- Disqualification for conviction of a
criminal offence (s. 2 & s. 5 CDDA 1986)
- Disqualification for persistent breaches
of company law including directors' duties
(s. 3 CDDA 1986)
- Disqualification for fraud, etc. in the
winding up of a company (s. 4 CDDA 1986)
- Disqualification of an unfit director of
an insolvent company (s. 6 CDDA 1986)
- Disqualification following an
investigation of the company (s. 8 CDDA
1986)
- Disqualification for breaches of
competition law (s. 9 CDDA 1986)
- Disqualification for participation in
wrongful trading (s. 10 CDDA 1986)
In addition to these statutory grounds it is
common for the articles of association of a
company to provide for situations in which a
director is automatically disqualified from
continuing to act as a director of that
particular company, such as his or her
bankruptcy.
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Accessibility
We take instructions from UK & international clients. Our independent lawyers are available by email, telephone & fax. With central Bristol offices we are just 90 minutes from London by road or rail and 15 minutes from Bristol International Airport. We can travel to meetings if required.
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Independent approach
We are an independent professional law firm here, not a legal factory turning out mass-produced products. In our experience, determined case-handling is more likely to produce effective results.
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Turnaround time
Solicitors at Humphreys & Co. look to input not only
careful legal work and precision but also the determination
to keep matters moving. They aim to work in clients' real
interests with energy and pragmatism.
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Communication skills
Solicitors at Humphreys & Co. always try to open up the
legal process by giving advice and explaining options to
clients in a concise and straightforward way, identifying
clear courses of action whatever the technical or legal
complexities of the subject. |
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