When conducting the affairs of a company, a director has to observe fiduciary and other duties to that company. 

The description ‘misfeasance’ covers inappropriate actions in breach of such duties and accusations of such behaviour generally arise upon the liquidation of a company.

Claims of misfeasance are normally initiated by creditors, shareholders and company liquidators.                   

Tim Thompson of Kangs Solicitors briefly outlines the position.

Our award-winning team of solicitors is nationally recognised for its work in assisting clients facing investigations of all aspects including those involving director’s misfeasance and company Insolvency. 

Our team is led by Hamraj Kang, a nationally recognised leader in the field of financial crime investigations.

Kangs Solicitors fields expert teams to deal with both civil and criminal investigations available as follows:

What is Misfeasance? | Kangs Wrongful Trading Solicitors

  • The Companies Act 2006 (‘the Act’) outlines what constitutes misfeasance:

Section 212                    

This section applies if in the course of the winding up of a company it appears that a person who—

(a) is or has been an officer of the company,

(b) has acted as liquidator or administrative receiver of the company, or

(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company,

has misapplied or retained, or become accountable for, any money or other property of the company, or been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company.

  • Examples of such inappropriate behaviour include:
  1. preferential transfers,                             
  2. undervalue transactions,                       
  3. concealing or removing company assets.

What Are The Duties Of A Director? | Kangs Company Act Offences Solicitors

The Act provides for the duty to: 

Section:

  • 171        –              act within powers
  • 172        –              promote the success of the company
  • 173        –              exercise independent judgment
  • 174        –              exercise reasonable care, skill and diligence
  • 175        –              avoid conflicts of interest
  • 176        –              not to accept benefits from third parties
  • 177        –              to declare interest in proposed transaction or arrangement.

Potential Consequences For Breach | Kangs Misfeasance Defence Solicitors

  • A Court Order may be sought requiring the director to restore the company to its position prior to the breach of any duty(s) and which, inevitably, will render the director personally financially liable.
  • A Director may be subjected to Disqualification Proceedings resulting in a ban from holding office within a company for up to fifteen years.

How Can We Help? | Kangs Insolvency Solicitors

The team at Kangs Solicitors has extensive experience assisting clients in respect of civil and criminal investigations and proceedings of every nature including those arising from company misfeasance.

If you require any advice and support in matters such as:

claims of misfeasance,

wrongful and fraudulent trading or

Director Disqualification,

please do not hesitate to contact our Team through any of the following who will be happy to provide you with some initial advice:

Hamraj Kang
hkang@kangssolicitors.co.uk
07976 258 171 | 020 7936 6396 | 0121 449 9888

Tim Thompson
tthompson@kangssolicitors.co.uk
020 7936 6396 | 0121 449 9888

Stuart Southall
ssouthall@kangssolicitors.co.uk
0121 449 9888 | 020 7936 6396