Companies Act 2014 section 232

Breaches of certain duties: liability to account and indemnify

Section 232 sets out the financial consequences for directors who breach their duties to the company, requiring them to hand back any gains and compensate the company for any losses suffered.

• A director who breaches core fiduciary duties must account to the company for any personal gain and indemnify the company for any resulting loss or damage
• Where the company enters into prohibited transactions with directors, connected persons, or directors of parent companies, all responsible parties are jointly and severally liable to return gains and compensate for losses
• Directors can avoid liability if they prove they took all reasonable steps to ensure the company complied with the rules, and connected persons can avoid liability if they were unaware of the circumstances making the transaction unlawful
• The company retains its existing common law and equitable rights to claim damages, but the total compensation awarded cannot exceed what is fair and reasonable in the circumstances