When a business has been declared insolvent and liquidated,an investigation will be conducted into the what happened in the business leading up to the insolvency. Creditors may then receive some monies from the liquidated company – normally by a solicitor (liquidator or administrator) who has been appointed to resolve the affairs of the business.
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However,if the investigation indicates that the directors of the company acted or failed to act in a way that were not in the best interests of paying creditors,they can be held liable personally for the remaining amounts that should be paid to creditors. These are referred to as misfeasance claims. There are many different actions that are thought to fall under the definition of misfeasance.
What Does Constitutes Misfeasance?
Any deed that is in breach of a director’s fiduciary duty to care for the company,its clients,creditors and the public in general can be considered to be misfeasance. More specifically,it is the misappropriation or misapplication of the funds,assets or property of the company that resulted in insolvency or the inability to meet financial obligations to creditors. The following misapplication of funds can be considered to be misfeasance:
– Preferential payment where one creditor has got their money or has been promised full payment in preference to other creditors.
– Selling assets at less than their real value.
– Hiding assets or removing assets from the business with the idea of preventing them being used to pay creditors.
– Drawing a higher salary regardless of the failing financial state of the company.
– If the director has actually declared or paid illegal or incorrect dividends.
The breach of duties that are assigned to a director by the Companies Act 2006,can result in a misfeasance claim by one or more parties.
Just What Are Misfeasance Claims?
Any creditor that can prove that a director was in breach of his fiduciary duties which results in the non-payment or partial payment of the company debt,can claim for misfeasance. The appointed liquidator or administrator will usually check the insolvency as well as the actions of the directors after insolvency for misfeasance. If misfeasance has been found,a monetary claim in the amount of misfeasance,asset or partial compensation (plus interest) can be sought against a director in their personal capacity. If the claim is successful,the funds will be paid back to the company from which creditors will be paid.
Possible Defences Against Misfeasance?
There are a number of defence options that a director can take to protect themselves against a misfeasance claim. One common defence is the Duomatic Principle where a director cannot be held liable as long as they can prove he acted in accordance with a vote by shareholders making his actions that of the company and liability for the actions the responsibility of the business. A statutory defence can also be made where it can be shown that the director was acting in the best interests of the company at the time.
It is vital for directors to understand what are misfeasance claims in order to avoid acting in any way that does not meet their fiduciary duty and get legal advice before acting in a manner that may constitute misfeasance.
Key holding services can provide many benefits to your business that you might not be aware of. These benefits are important to consider if you are in two minds about using key holding services. When you know what the benefits are,you will be able to make a better decision about the use of the service.
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The Convenience of using keyholding services
The biggest benefit of using key holding services is the convenience they provide. When your intruder alarm is triggered,in most instances it will be a false alarm. While this is a good thing because it means you are not being burgled,it can be very annoying for the person who has to go and check your business premises.
With every false alarm,the key holder will have to visit the site to open for the security company. They will also have to stay at the premises for at least an hour. When you use a key holding service,it is they that have to attend to the site and your staff can rest easy.
Better Reaction Time
The employee that you select as the keyholder for your business could live far away from the office. This is especially true if your office is in the centre of a city. In such instances,the time taken for the keyholder to get to the site can cause issues.
When you utilise a key holding service,they will generally provide a faster reaction time. This faster reaction time could reduce the damage to your property. Of course,you will need to check where the service provider you choose bases the staff that will respond to your enquiry to get this benefit.
The Safety Factor
Another benefit of a key holding service is the safety it provides. When you have an employee acting as the key holder,they can be in danger visiting the site after the alarm goes off. Staff safety is something that you need to think about at all times.
The person sent by the key holding service will generally be trained to handle any dangerous situations. This is training that your staff member will not normally have and it can be the difference between being safe and not. However there may also be other issues at the site that your staff member is not able to sort out.
Having Spare Keys Available
When you utilise a key holding service,you know that there is always a spare set of keys you can get hold of. This is very useful if the keys are damaged or get lost. Regardless of what occurs,you will always be able to gain access to the property because of the keys the service provider holds.
There are many advanages that key holding services can give to your company. Not only will they have a quicker response time,but they are also trained to handle any situation,which will improve the safety of the response. Letting a company handle your keys will also be more convenient for you and your business. Of course,to make sure that you get these benefits,you need to select the best key holding service provider.