THE LIABILITY OF DIRECTORS IN PRIVATE LIMITED COMPANIES

Description

In examining the liabilities of directors, there are two main worries that comes to mind as a result of the infelicities or lacunae of the laws. These are at the level of enforcement and implantation. One of the biggest benefits of incorporating a business and becoming a Private Limited Company (Ltd) under OHADA and English Law regimes is the protection it provides the directors and shareholders from the company’s debts. Having ‘limited liability’ allows shareholders to invest in businesses safely in the knowledge that if things were to go wrong, all they stand to lose is the value of their initial investment, and importantly, their personal finances and assets would be safe. The possibility of making company directors liable for their misdeeds can be said to constitute a step forward by the legislator in eradicating the opaque manner in which some directors carry on the business of the company. Directors found guilty of any management misdeeds are likely to engage either their criminal or civil liability or both depending on the circumstances at hand. These and more constitutes the core elements discussed in this piece of work.