|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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Claims against directors: responsibilities of a director: shareholders and directors of companies: company compliance: solicitors: Bristol, London, international clients
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 an 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.
company law and director compliance
new ventures and joint ventures
buy-ins and buy-outs
share and asset sales and purchases
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:
Commercially focused and fully transparent costings
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.
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.
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.
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.
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.
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.