There are several acts in a company’s collection of liabilities that will hold the director or officer personally accountable if their actions result in financial damage to the company.
Firstly, if the director or officer neglects his or her personal duty of care, then they are held personally responsible. This would be as a result of a director not fulfilling their responsibility to look after all the people under their employment and care.
Secondly, directors will also be held responsible in the event of them breaching their duty of loyalty to company. It is acceptable for a director to make a decision and take an action that will benefit both them personally and the company. However, if they make a decision that will only benefit them, they are a liable for prosecution.
The third transgression that a director is liable for is misappropriating a corporate asset for their own personal use or in aid of another business. This is applicable if a direct has used company property or funds illegally and without authorisation.
The fourth transgression is quite similar to number three, and it is commingling personal and business assets. This means that the director has intentionally combined their own personal assets with that of the business with the intention of personal benefit.
The final transgression that could hold a director liable for prosecution is if they fail to disclose any existing conflicts of interest. Whether they are possible or genuine conflicts, it is a director’s duty to make these apparent to the company. In basic terms, the director is withholding the truth from their respective company and this is prosecutable as per their liability act.
Firstly, if the director or officer neglects his or her personal duty of care, then they are held personally responsible. This would be as a result of a director not fulfilling their responsibility to look after all the people under their employment and care.
Secondly, directors will also be held responsible in the event of them breaching their duty of loyalty to company. It is acceptable for a director to make a decision and take an action that will benefit both them personally and the company. However, if they make a decision that will only benefit them, they are a liable for prosecution.
The third transgression that a director is liable for is misappropriating a corporate asset for their own personal use or in aid of another business. This is applicable if a direct has used company property or funds illegally and without authorisation.
The fourth transgression is quite similar to number three, and it is commingling personal and business assets. This means that the director has intentionally combined their own personal assets with that of the business with the intention of personal benefit.
The final transgression that could hold a director liable for prosecution is if they fail to disclose any existing conflicts of interest. Whether they are possible or genuine conflicts, it is a director’s duty to make these apparent to the company. In basic terms, the director is withholding the truth from their respective company and this is prosecutable as per their liability act.
