Many directors make the mistake of assuming they do whatever they please through the intermediary of a company but this is far for the truth. There are very serious liabilities and duties imposed upon you as a director under the Corporations Act and usually under the company’s constitution, as well as any shareholders agreement that may have been entered into.
Breach of these duties and obligations can result in criminal liability so you need to be careful about how you exercise your powers, particularly as a director and particularly when there is a dispute between directors or shareholders.
Sometimes disputes can be resolved informally once everybody is clearly aware of what their obligations and duties are and this is preferable to court proceedings if possible.
Directors should never assume that just because they have a majority on the board, disgruntled shareholders even when they are a small minority still have very significant rights that cannot be ignored.
Our Corporate Law Team has broad experience in all aspects of corporate law. corporate governance and directors' duties. The Team provides advice to clients on the rules, relationships, policies, systems and processes whereby authority within organisations is exercised and maintained.
Contact our Corporate Law Team today for their advice and guidance and to ensure you are not in breach of your obligations and duties.