DIRECTORS who flout their obligations under company law and fail to pay due regard to the interests of shareholders and creditors face an increasing risk of disqualification.
That is the new warning being spelt out by the Association of Chartered Certified Accountants (ACCA).
According to ACCA, more than 900 individuals in the UK were disqualified from acting as company directors between March and September 2001 for breaches of directors' duties or for conduct involving recklessness or dishonesty. This was a 24 per cent rise over the same period in 2000.
John Brace, ACCA's regional spokesman for Buckinghamshire and Berkshire, said: "The ease with which companies may be formed and the relatively obscure nature of the law relating to directors' duties and powers has created a situation in which many directors fail to appreciate how the law applies to them.
"Many directors of very small companies are simply unaware that they are in charge of limited companies and that they and their companies are consequently governed by company law."
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