Hi All, am considering volunteering to become a director of a limited company that is a registered charity. Have been involved with this community group for a while now doing some voluntary work. No shares. Would not be receiving a fee for being a director. Just wondering if anyone could tell me what my main obligations would be as a director. Have had a look at the leaflet "Six Things a Director Should Know" and it deals mainly with accounts. Not too worried about that side of things as the accounts are audited every year.
More worried if it went out of business owing money (could I be held liable) or if it were sued (although insurance is in place).
To maintain all statutory registers and other documents
To file certain documents with the Registrar of Companies / CRO
To manage the affairs of the company with reasonable care and skill
Go Prepare for, go to and participate in all Directors meetings
To keep up to date with all affairs of the company
Directors must exercise their powers in good faith and must at all times act in the best interests of the company as a whole.
Directors are not allowed to make an undisclosed profit from their position as Directors
Directors must account for any profit they derive from their position as Director
Directors are obliged to carry out their functions with due care, skill and diligence
Directors must exercise their powers for the purpose for which they were intended
In relation to your liability should the company go out of business owing money, you as a member would only be liable for the amount to which you subscribe, which normally in a company limited by guarantee (no shares) is limited to a maximum of €1.
However, in your capacity as company director, the limited liability will protect you to a certain extent, but there are circumstances where the "corporate veil" can be lifted and the directors can be personally held liable for debts in the company. Some examples of this would include:
Personal guarantees - If a director is asked to support the company's borrowings and they do so, the director will be liable for the debt or transcations should the company not repay the debt Tort - Directors will be liable if they are found guilty of obtaining say, a loan by negligent or fraudulent mis-representation Legislation - Legislation such as the Health & Safety at work Act and the Environmental Protection Act imposes liabilities not only on companies, but also on their directors Fraudulent/wrongful trading - Director will be held liable and will be personally held liable for any debts incurred in those circumstances
As mentioned above, you should also look at publications published by the ODCE for a wider overview as this is just a brief synopsis.