While a director is protected to some extent by the corporate veil, directors have a range of responsibilities and potential liabilities.
Some of these include:
1 Duties to act honestly, not to improperly use insider information or their position, avoid a conflict of interest, and to disclose material personal interests.
2 Duty to not abuse a corporate opportunity.
3 Duty of care and diligence.
4 Duties to third parties.
5 Duty to keep proper accounts and records.
6 Insolvent trading.
7 Uncommercial transactions.
8 Some company debts.
9 Guarantees provided by the director.
10 Pay as you go withholding and superannuation guarantee charge obligations.
11 Occupational health and safety laws.
12 Environmental protection laws.
Practical tips for directors to limit their personal exposure to liability include:
1 Obtain proper advice in relation to obligations that apply to the activities of the company and the obligations that are imposed by legislation not only on the company but also personally.
2 Have in place appropriate insurance including directors and officers insurance.
3 Ensure proper procedures exist and are followed to minimise risk to the company.
For legal advice regarding your rights and responsibilities please contact McAuley Lawyers on (02) 9633 1826 or email firstname.lastname@example.org
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