Statutory Duties of Directors

Abstract

The general duties of directors (see Chapter 11) are in some cases reinforced by specific statutory duties spelt out in what are usually very complicated provisions. A general overview of some of the more important sections is given here. The detail of some of the provisions appear in the Casenotes. Many of these duties were introduced as a result of financial scandals. The government of the day wished to be seen to be ‘doing something’ to remedy the situation. Very few of the provisions in Part X of the Companies Act 1985 are enforced and abolition of this part of the Companies Act is under active consideration. The Companies Act 1985, s. 320–330 prohibits companies from entering into contracts for the buying and selling of property, making loans and similar transactions to or in favour of directors and, in some cases, persons connected with them. ‘Director’, for the purpose of these sections, includes ‘shadow’ director.