shipping law

PART A - Director 's Duties

According to the law , the directors of a Company have certain legitimate duties . First , the common law imposes a general fiduciary duty on the directors , which is termed as equity . Second , directors are under a duty to exert utmost care in their activities under the premise of common law of negligence . The Companies Acts , the Insolvency Act 1986 and other related acts impose several duties on directors . In addition to these duties , the constitution company for which they act as directors also imposes various duties on them

. Moreover , other legislation and the provisions of common law impose additional duties (What legal liabilities could directors incur

Directors have to protect the assets and moneys of their company since they are its custodians . They are required to exercise their discretion in safeguarding the assets of the company . Directors cannot claim immunity on the grounds that they were regarded as nominees , and that they had acted at the behest of some other person . These claims are unlawful and the courts have rejected them in several instances (Selangor United Rubber Estates v . Cradock , 1968

Directors cannot derive unauthorised profits in the course of their duty towards the company . In Boston Deep Sea Fishing Co v Ansell , the suppliers had paid certain amounts to a director at the time of his placing s in the name of the company . It was held by the court that the director had to disclose the particulars of these amounts to the company (Boston Deep Sea Fishing Co v . Ansell

Directors are required to exercise their powers , only for the benefit of the company and for the intended purpose for which those powers had been bestowed on them by the company . The case of Hogg v . Cramphorn establishes the abuse of powers by directors . There had been a take - over bid of the company , and it was apprehended that the shareholders would ratify that bid . The directors of the company , were not in favour of this takeover , hence they formed a trust to benefit the company 's employees . These directors acted as the trustees . The company made a loan to the trust , which enabled it to purchase newly issued shares of the company . In this manner , the directors acquired sufficient shares to defeat the take - over bid (Hogg v . Cramphorn , 1967

The whole operation of forming the trust and acquiring shares was aimed at defeating the takeover bid . The court annulled the entire process because it considered the aim of the directors in forming the trust was to defeat the takeover bid . The court also held that the directors had abused their powers by allotting shares to the trust . The company had granted them power to raise finance for the company (Hogg v . Cramphorn 1967

As such , Company directors have two types of duties , namely , those that fall under a duty of care and fiduciary duties . The former requires the directors to employ the care that a prudent and attentive individual would under similar...