Solicitors for company directors

The day-to-day management and strategy of a company is usually delegated to the board of directors of a company. It is the directors who are responsible for making decisions in relation to the business.

Directors of UK companies have significant personal responsibilities and face potential legal risks if they do not make their decisions or act within the remit of applicable legislation or the Articles of Association, or indeed any other private agreement (such as a shareholders’ agreement or service contract).

By seeking legal advice, directors can make informed decisions, protect their legal interests and reputation and navigate the ever changing complexities of UK law.

Why Should Directors Seek Legal Advice?

• Mitigate risks – to help you understand your legal obligations as a director (including the director’s duties) and to minimise the risk of personal liability. A director may be held personally liable for losses suffered by a business which are proven to be the result of board decisions, or a failure to act properly.
• Make informed decisions – to guide you in making sound business decisions in accordance with applicable legal and procedural requirements.
• Protect your interests – to negotiate favourable terms in your director service contract and protect your reputation.
• Comply with laws – ensure your company and its directors are compliant with all relevant laws.

Key Legal Issues where we can help

• Director shareholders –. We can help ensure board decisions are taken with due consideration of legislation covering declarations of interest or conflict of interest. Where remuneration is concerned, we can assist with drafting option arrangements or service agreements. Articles of association and/ or shareholders’ agreements may also be updated to reflect good leaver and bad leaver provisions.
• Personal Liability – Directors face risks of both civil and/or criminal law liability. Civil law risks can include wrongful trading or negligent misstatement. Criminal law risks include fraudulent trading, significant health & safety breaches and/or bribery or corruption offences. It is obviously important to be sure that the company is acting lawfully at all times.
• Director Duties – Company directors have fiduciary duties including to act in good faith, promote the company’s success, exercise reasonable care and skill and avoid conflicts of interest (i.e. avoiding situations where personal interests conflict with the company’s interests). In addition, Company directors have statutory duties under the Companies Act 2006, as well as a wide range of regulation and legislation including the Insolvency Act 1986, the Company Directors’ Disqualification Act 1986, the Health and Safety at Work etc Act 1974 and the Corporate Manslaughter and Corporate Homicide Act 2007. We can assist you in complying with applicable
• Insolvency related risks – where a company may be or is insolvent and liquidators are called in under English law, the liquidators have a legal duty to consider the conduct of the directors in the lead up to insolvency. We advise directors on keeping within the law when the business is in financial difficulties.
• Director Service Contracts – Directors should have clear contracts outlining their salary, bonuses, and other benefits, also including fair termination provisions, including notice periods and severance payments.

Sectors

We have advised directors in numerous sectors, including technology, property development, transportation, care homes, aviation and hoteliers (to name a few). These businesses range from small start-ups to larger corporate clients.

Our advice extends to both private sector (private companies and public companies) and charitable bodies.

Our knowledge also extends to issues that directors may face with regulatory requirements (notably compliance with relevant sanction regimes).

Examples of our experience

• Exiting director – advising a director on his resignation from a financial services business in contentious circumstances. This included negotiating and advising the director on the treatment of his shares by the company (as a leaver under the shareholders’ agreement) upon resigning as a director employee. We also assisted on negotiating the retention of the director’s key clients after his exit from the company.
• Breach of director duties – advising a board of directors for a technology service company on the removal of a director. The director had misappropriated funds from the company and requested money from potential investors of the company for personal use with no connection to the company.
• Director service contracts – acting for companies in the drafting of employment contracts for directors across multiple sectors. This includes for private and public companies, as well as charitable organisations.
• Remote directors – advising a registered charity on the employment of a director based in Eastern Europe where it was proposed for the director to provide services remotely. This included drafting the employment contract, and considering potential issues on permanent establishment and the impact of the employment law where the director resided.