Checklist of Responsibilities of Company Directors

In the U.S.A the business of the LLC or Corporation is managed and controlled by the directors on behalf of the members or shareholders. The directors have to carry out their duties with the interests of the shareholders in the corporation in mind, as well as its creditors.

The directors have to take note of the following:

  • They must act in good faith and in the best interests of the corporation

  • They must exercise their powers for proper purposes.

  • They must comply fully with the Corporations Act and the constitution of the corporation (if it has one).

  • They must not recklessly trade.

  • They must not incur any obligations if they believe that the corporation will not be able to fulfil it.

  • They must not incur any debts or take on further credit if they believe the company is insolvent.

  • They must exercise all reasonable care, diligence and skill at all times.

  • If they don’t observe these duties they may be found personally liable for any costs or losses incurred.

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