Director's Duties

Abstract

A company, at law, is a separate legal entity that is capable of suing and being sued. A company is run by a Board of Directors, it is those directors that must manage and take responsibility for that company, but they are not, themselves, the company. Because the company is a separate legal entity, it is owed duties by its directors and may sue the directors if they fail to adequately protect the companies interests. That may appear fanciful for when is the Board, as the management of the company, going to authorise the company to sue them? The answer may be that the Board will not, but in the event that the company is subject to being wound up, so that a receiver or other manager is appointed, it could be that the new management would seek to sue the old management for mistakes made.