Last month’s On Target summarised upcoming Companies House transparency reforms. This month, we continue on the topic of accountability and transparency, highlighting arrangements and dealings between a company and its directors that would breach English company law, whether undertaken knowingly, or not.
In situations where the directors and majority shareholders approve of the relevant arrangement, it is tempting to consider the breaches as “technical”, and of little consequence. However, in the context of a due diligence exercise (e.g. on a sale), a shareholder complaint or dispute, a credit default or an insolvency process, the consequences for the directors can be severe, and can include personal liability for any resulting losses.
The five arrangements below are common examples rather than an exhaustive list, and each may, in addition, leave the director vulnerable to accusations of breach of duty or may place the director in a position of conflict.
MJ Hudson works with clients in the fields of law, international administration, fund management, investment advisory, and IR and marketing, across both alternative and traditional asset classes.Gresham House Strategic PLC (LON:GHS) has a 1.3% ownership of MJ Hudson as of June 2018.
