Question

Outline the liability of the directors in terms of their duties under the Corporations Act 2001

Answer 1

The most important foundation of liability of the directors in terms of their duties under the Corporations Act 2001 is that the director must always act for the overall benefit of the company. I will just outline the duties and liabilities under Corporations Act 2001.

• A director should always act in good faith, and should be towards the best inyterest of the company.
• He should take due care and skepticicsm before making decisions that effect the company.
• A director should never place himself in a position where, his personal interest are conflicting with that of the companies interest.
• He should not take advantage of his position as a director to make personal benefits out of the company
• The director should take all measures to prevent the company from being insolvent
• The director should not and cannot delegate his directoral duties to any other employees, unless and until specified in the company's constitution.
• Insider trading is a serious criminal offence and directors should refrain from the same.
• Director's are liable to issue directors report along with financial statements, the report should include mandatory matters specified by statute.