The general duties of all directors – de facto and shadows included – are set out here (Section 223) and each and every director is responsible for ensuring the company is in compliance with the Companies Act 2014.
The duties owed by directors to the company may be set out in the same way as any other fiduciary duty owed by them to the company (Section 227).
The statement which directors must deliver to the CRO with the company’s constitution must now include each individual director’s signature about the following statement: “I acknowledge that, as a director, I have legal duties and obligations imposed by the Companies Act, other statutes and at common law.” (Section 223)
There is a new section which sets out the law in relation to secretaries (Section 226). The secretary is the custodian of the company’s various registers. The secretary’s duties are delegated by the board, and the secretary cannot ensure compliance by the company with the Act, etc, because the secretary doesn’t have the authority to do so.
There is a new duty on directors of a CLS to ensure that the secretary has the requisite skill to perform the role. Also new, is the statement which the secretary must sign upon consenting to carrying out the office: “I acknowledge that, as a secretary, I have legal duties and obligations imposed by the Companies Act, other statutes and at common law.”
Section 228 sets out the fiduciary duties of directors. The fact that they are set out in statute is new. The duties are set out in general terms, and are not intended to be an exhaustive list.
The rule that directors must “have regard” to the interests of the company’s employees – generally seen as being weak – is re-enacted here (Section 224). This was previously set out in Section 52 of the Act of 1990.
The rule that directors must prepare a compliance statement containing certain information is re-enacted here (Section 225). It was previously set out in Section 205E of the Act of 1990. The information principally relates to the company’s compliance with Companies Act and tax law obligations; with the company’s compliance procedures; and with the arrangements the company has in place for reviewing these procedures. The only new element is the monetary limit has been increased. The compliance statement must be preferred where the balance sheet of the CLS exceeds €12.5m and the turnover exceeds €25m.
The rule that directors must disclose an interest in contracts entered into by the company – up to now found in Section 194 of the 1963 Act – is re-enacted here (Section 231).
The common law remedies of account and indemnity – in the case where a director uses the company’s information of opportunities for personal gain – are put on a statutory footing in Section 232, which is new. The section also replicates – which were the same as the common law remedies of account and indemnity – the remedies that were set out in the CA 1990 in the cases of substantial property transactions between director and company, and in the case of loans, credit transactions, etc, between company and director.
If an action is taken against a company officer in negligence, default, breach of duty, or breach of trust, the court can relieve that officer of liability if the officer shows that he acted honestly and reasonably (sic) (Section 233). This was previously set out in Section 391 of the 1963 Act.
An officer who fears one of the above actions, may make a pre-emptive move and ask the court to absolve him of liability in respect of the wrong concerned, and thus head off the anticipated action (Section 234).
The general rule is that any provision in the company’s constitution – or any contract with the company – which purports to exempt or indemnify any officer against any liability will be void (Section 235). The exemptions are limited and can be seen here (Section 235(4)).