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The extent of the director’s responsibility for any failure by the company to comply with any of the following provisions of the Companies Act 1985, namely— (a) s. 221 (companies to keep accounting records); (b) s. 222 (where and for how long records to be kept); (c) s. 288 (register of directors and secretaries);
Under the provision of this act, when a company goes into liquidation, the liquidator must make a report to the Disqualification Unit of the Department for Business, Innovation and Skills on the conduct of all directors. Many legal systems (including English law) recognise the blue sky defence; which broadly provides that, if the directors, in ...
Long title: An Act to reform company law and restate the greater part of the enactments relating to companies; to make other provision relating to companies and other forms of business organisation; to make provision about directors’ disqualification, business names, auditors and actuaries; to amend Part 9 of the Enterprise Act 2002; and for connected purposes
Mr Cruddas was a chartered accountant and director of five insolvent companies, debt amounting to £600,000. He did not keep proper accounting records, failed to ensure annual returns were filed, and that annual accounts were prepared and audited, caused more debt when he knew of severe financial difficulty, traded while insolvent, did not pay the Crown debts for PAYE, NIC and VAT.
Cases under the Company Director Disqualification Act 1986, such as Re Barings plc (No 5) [96] show that directors will also be liable for failing to adequately supervise employees or have effective risk management systems, as where the London directors ignored a warning report about the currency exchange business in Singapore, where a rogue ...
while financial accountancy information is computed by reference to general financial accounting standards, management accounting information is computed by reference to the needs of managers, often using management information systems. Focus: Financial accounting focuses on the company as a whole.
Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance. Directors' duties are analogous to duties owed by trustees to beneficiaries, and by agents to principals.
Supply of accounting information: Financial accounts form a crucial link in enabling providers of finance to monitor directors. Imperfections in the financial reporting process will cause imperfections in the effectiveness of corporate governance. This should, ideally, be corrected by the working of the external auditing process. [103]