Hong Kong Directors' Duties
05 December, 2016
The liabilities and responsibilities of company directors derive from the constitution of the company, statue law as well as case law.
Every company director is advised to follow the general principles. The Companies Registry in Hong Kong issued a guide which is available on the website of the Registrar (www.cr.gov.hk).
The General Principles of Directors' Duties
Company director are required to:
act in good faith for the benefit of the company as a whole
use powers for a proper purpose for the benefit of members
no to delegate powers except with proper authorization and duty to exercise independent judgement
exercise care, skill and diligence
avoid conflicts between personal interest and interest of the company
not to enter into transactions in which the directors have an interest except in compliance with the requirements of the law
not to gain advantage from use of position as a director
not to make unauthorised use of company's property or information
not to accept personal benefit from third parties conferred because of positon as a director
observe the company's constitution and resolutions
keep accounting records
If the directors don't comply with their duties they may be disqualified from acting as directors and may be also liable to civil or criminal proceedings.
Furthermore, directors are encouraged to refer to detailed reviews of the particular role in law. For Hong Kong companies, the Guidelines for Directors and the Guide for independent non-executive directors have been issued by the Hong Kong Institute of Directors (www.hkiod.com).
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