| Commentary

40 Codification of rules

| Commentary

40 Codification of rules

Under the previous law, the directors’ duties were derived from equitable and common law rules, and were not written down in statute. In drawing up a statutory statement of these duties, the Companies Act 2006 recognised that case law and legislation adopt two very different approaches to establishing legal principles and sought to reconcile these approaches in codifying the pre-existing law. On the one hand, legislation is formal and seeks to lay down general principles which can be applied to a range of different situations with precision. On the other hand, a judgment is necessarily directed

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