A Critical Analysis Of The Duties And Liabilities Of Directors Of A Company: A Case Study Of Kampala District

ABSTRACT

Tlus study "A Critical Analysis of the Duties and Liabilities of Directors of a Company" was

carried out in Kampala to specifically examine; the different duties of directors of a company

and their liabilities; the effectiveness of the legal regime that provides for directors and their

duties; the various enforcement challenges that the company directors encounter in course of

performing their duties; to analyze possible remedies that are available to an aggrieved

shareholder where a director has breached his duties and the defenses available to a director;

and to suggest possible recommendations to the problems being encountered by directors in

the perfonnance of their duties. To comprehend this, literature review of the specific

variables was can"ied out and the study was mainly centered on book and documentary

evidences as well as primary data sources thus was qualitatively dt"iven.

The study established that much as there is a revised law to govem duties and liabilities of

companies, remedies have not adequately been provided. While one becomes a director

he/she receives a direct impact on the strategy and success of the business which imposes a

lot much more than the law has to protect directors, as much as companies continue to be

addressed as separate legal entities. The law of recent imposes a strict liability on personal

mistakes of directors.

The study concludes that much as directors have general duties and liabilities to the growth of

companies, they apparently have a strict liability imposed on them as different from the

liability traditionally enjoyed under the cover of the company name. Directors have become

more responsible for the liabilities they commit.

The study recommends; Re-defining the interpretation of company by law; Engaging with

legal councils ahead of challenges; establishing 1-isk management systems supervisory of the

board; engaging customers than firing employees and contracting agencies; Promoting recognition of the mle oflaw;