Director’s Duties and Obligations

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IDIRECTOR’S DUTIES AND OBLIGATIONS
Contents
The Director’s are under the obligation to ensure the goods were insured in their duty to act with due care and diligence. 1 Area of Law 1 Principle of Law 1 Application of Law 4 Conclusion 4 The Company has been traded into insolvency. 4 Area of Law 4 Principle of Law 5 Application of Law 6 Conclusion 6 The Director’s Liability for insolvent Trading 7 Principle of Law 7 Application of Law 9 Conclusion 9

The Director’s are under the obligation to ensure the goods were insured in their duty to act with due care and diligence.
Area of Law
The area of law involved in this particular case to prove director’s duty to take due care is the Corporation Law.
Principle of Law
The Director’s duties fall under two categories the fiduciary duty and the duty to exercise care, diligence and skill while they are discharging their duties under the position. The Corporations Law provides that that a Director has to exercise reasonable degree of care and diligence while he is exercising his or her duties (Section 232 (4), The Corporation Law n.d.). If there is a failure to comply with the provision of 232(4) it leads to an offence punishable with fine up to $5000 and shall also lead to civil proceedings (Fisse 1992).
Austin J was the first to review the statutory duty of care and diligence where the entire history of the same begins (ASIC v Vines 2003) (ASIC v Rich 2003). The circumstances which ae necessary in such a case are the size and the nature of the business, whether it is a listed or an unlisted company, the constitution of the company, the board composition and the manner in which work has been distributed among the board and its various officer (ASIC v Rich 2009). A director or any other officer of the corporation must always guarantee that they implement their powers and discharge their duties…...

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