<img alt="" src="https://secure.mass1soma.com/153281.png" style="display:none;">

Duties & Powers Of Directors Of Private Companies In Ireland


233 Duties A director is an officer of a company, appointed by the shareholders or by the other directors where the Articles of Association of the company allow, to manage the company on behalf of the shareholders.

The responsibilities of directors are wide and diverse. Their duties arise from two sources, statute and common law.

Common Law Duties

A special position known as a “fiduciary position” exists for directors under common law. Such common law duties include the following:-

  • Directors must exercise their powers in good faith and in the interests of the company as a whole; 

  • Directors are not allowed to make an undisclosed profit from their position as directors and must account for any profit which they secretly derived from their position as a director;

  • Directors are obliged to carry out their functions with due care, skill and diligence.

Statutory Duties

Certain statutory duties are imposed on the company but are entrusted to the directors, such as the requirement to maintain the statutory registers. Other statutory duties are imposed on directors themselves such as the various transactions involving the directors personally and the company.

Directors’ statutory duties include a wide variety of requirements such as:-

  • Duties as a company officer to comply with the Companies Acts;

  • Duty to maintain proper books of account;

  • Duty to prepare annual accounts;

  • Duty to have an annual audit carried out;

  • Duty to maintain certain registers and other documents;

  • Duty to file documentation with the Companies Registration Office;

  • Duty of disclosure of certain personal information;

  • Duty to convene general meetings of the company;

  • Duties regarding transactions between the Directors and the company; and

  • Duties when a company is in liquidation or insolvent.

Negligence In Duties 

Penalties fluctuate depending on the precise offence and vary from financial penalties to being restricted from being a director of certain companies for five years to disqualification as a director.

The High Court may disqualify persons from acting as directors of Irish companies for such periods as it sees fit  pursuant to Section 160 of the Companies Act 1990. Recent disqualification orders carried out by the Office of the Director of Corporate Enforcement have ranged from three to eight years. Disqualification can extend beyond the role of director and may include disqualification from any direct or indirect involvement in the promotion of companies. 

Directors Need To Be Aware Of Their Legal Responsibilities

It is crucial that directors take their duties seriously and ensure that they do not become subject to penalties or other judgments from the Office of the Director of Corporate Enforcement or the Companies Registration Office. Recent high profile cases both in Ireland and overseas have emphasised the consequences to which directors can become exposed to in their role.

All directors are bound to the duties and responsibilities which are set out above and every person appointed as a company director should become familiar with the legal responsibilities and obligations attached to the position.

How Does The Canadian Nominee Structure Work?
Why You Should Put Your Trust In A Discretionary Trust
Read More
How A Process Agent Makes It Easier to Carry Out Transactions in Ireland
Read More
Ireland Releases New Guidance On Taxpayers Preliminary Tax Obligations
Read More
Ireland Give Guarded Welcome To OECD's Digital Tax Proposals
Read More

 Blog Comments