A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
What are a director's fiduciary duties?
Directors owe their company seven statutory duties under the Companies Act - and the one every insolvency turns on is how those duties shift when the company gets into trouble.
The seven, briefly
Act within powers; promote the company's success; exercise independent judgment; exercise reasonable care, skill and diligence; avoid conflicts of interest; not accept benefits from third parties; declare interests in transactions.
The shift that matters
While solvent, "success" means success for shareholders; as insolvency approaches, the interests directors must weigh shift to creditors - and once insolvent liquidation is inevitable, creditors' interests take priority outright.
That shift is what powers every claim in the insolvency toolkit: wrongful trading is diligence failing after the shift; preferences and undervalue transactions are even-handedness failing; unlawful dividends and loan account issues are the shareholder-first habits continuing after the ground moved.
Living the duties in a struggling company
Watch the real numbers, minute decisions and their reasons, treat creditors evenly, and take licensed advice when the shift is even arguable - the same short playbook that protects you personally.
0333 023 5090 - if you're unsure which side of the shift your company is on, that's the conversation.
InsolvencySupport.co.uk is operated by Xeinadin Corporate Recovery Limited (company no. 11415156), 8th Floor, 100 Barbirolli Square, Manchester M2 3BD. Our insolvency practitioners are licensed and regulated by the ICAEW.
This article is intended for general information purposes only and does not constitute financial, legal, or professional advice. Always take advice from a licensed insolvency practitioner about your specific position.