Commentary

19.3 Fiduciary duties extending to interests of creditors

BANKRUPTCY AND INSOLVENCY (CORPORATE INSOLVENCY) vol 3(3)
| Commentary

19.3 Fiduciary duties extending to interests of creditors

| Commentary

19.3 Fiduciary duties extending to interests of creditors

Generally, the management of the affairs of a company is vested by its constitution in its directors, who owe fiduciary duties and duties of care to the company when so acting. Their management is subject to scrutiny (and in an extreme case, their dismissal) by the company in general meeting, which owes no equivalent fiduciary duties or duties of care. The corollary is, in the case of a closely-controlled company, that the shareholders can, formally or informally, ratify acts of the directors (often themselves) which would otherwise be a breach of duty.

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