Posted by Kate Boyes BSc (Hons) FARLA MRICS on Thu, 2012-03-29 10:19
As a director of a management company there is no distinction in law between you and the director, of say, a multi national firm.
Without sounding like a doom monger, you could be sued personally and face substantial legal costs, especially if the management company itself has very little assets.
An example of 'why' would be for action you took, or failed to take, which caused financial loss to another party. The risk stays in place even when the director has resigned and moved away.
Tips:
- Make sure the D&O insurance covers both the company and the individual directors
- Consider run off cover indemnifying directors for a number of years after resignation
- Remember claims can be made against you for acts not just of yourself, but of your fellow directors
- Depending on the drafting of your memorandum and articles you might consider employing a 'professional' director who is experienced in the running of a company
- Directors of Right to Manage companies, who are under the perception that the duties are delegated to the managing agent, should realise and be advised correctly on their ultimate responsibilities.
Kate Boyes BSc (Hons) FARLA MRICS
Partner in charge of Residential Lettings
Kate established Alexandre Boyes Residential Lettings in 2003 and Alexandre Boyes Estate & Block Management in 2007. Collectively the departments are on target to manage c.1000 units by the end of 2013 and Kate is fiercely proud of the reputation both teams have in Tunbridge Wells.
Kate has a first class honours degree in Land Management from the University of Reading and trained at Nelson Bakewell (now Capita Symonds), a Property Consultancy, in London. She qualified as a Chartered Surveyor in 2004, and is a Fellow of ARLA.
Kate personally looks after a group of premium estate management clients, and is often called in as a consultant to new clients advising on complications in freehold acquisitions, accounts, planning and lease drafting, and has particular experience in listed buildings.
Kate has a young family and lives in Tunbridge Wells. When she isn't working (which is not very often!) she can be found enjoying a glass of red wine at Sankeys or spending time with her three children at home in Langton Green.
Comments
Directors' insurance
Very useful, I wish more people could provide guidance on these matters. It would be useful to receive more information about this matter.