Question
Explain the liability of directors towards the company and third parties. Can a director be held liable for criminal liability?
Answer :
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Skip in 10
Directors occupy a fiduciary position in a company and are regarded as trustees and agents of the company. Their liability arises from statutory provisions under company law, general principles of fiduciary duties, and common law. The liability of directors may be towards the company itself as well as towards third parties dealing with the company. Towards the company, directors owe fiduciary duties such as the duty to act in good faith, duty to exercise powers for proper purposes, duty to avoid conflict of interest, and duty not to make secret profits.
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