Company law: Directors and their duties in a nutshell

In last week’s blog post we explained that a company is a legal entity in its own right. Of course, a company still requires individuals to act for it, and these people are called directors.

In this blog post we’ll cover who the directors are, and the duties they’re expected to carry out.

Who can be the director of a company?

In our first blog post, we looked at two types of company in the Isle of Man, the 1931 Act company and the 2006 Act Company. There’s an important distinction in that a 1931 Act company has to have at least two directors who must be natural persons, but a 2006 Act company can have a single director and that director may itself be a limited company.

Who are the directors of a company?

Normally this is a straightforward question as you can find their names and addresses by a quick company search at the Isle of Man Companies Registry. The directors must be listed every year in an annual return.

For 1931 Act companies, and 2006 Act companies who have so elected, details of any changes during the year must also be notified to the Registry. You can make a search online here.

Apart from legally appointed directors, there are others who can be treated as directors. These are referred to as de facto directors (who act as though they have been validly appointed) and shadow directors (who habitually instruct the properly appointed directors how to act).

What are the duties of a director?

Why are the duties of a director so important? If it can be shown the company has suffered loss as a result of something a director has or has not done, the director can be liable to make good the loss.

Let’s look at some of the principal duties:


To act in good faith in the best interests of the company as a whole. If challenged, the director will be judged on what their honest belief was.


To act within the law and the constitution of the company.

No secret profits

A director must not use the company’s property, information or opportunities for his own or anyone else’s benefit.


There is no such thing in Manx law as a nominee director, a director cannot restrict their power to act.


A director must avoid conflicts of interest. Best practice is to disclose any potential conflict in a general meeting.

Care skill and diligence

Here there is a two-part test; has the director done what may reasonably be expected of a person in their position? Following this, their own personal experience is taken into account.

Administration and accounts

These are important parts of a director’s duties and will be the topic of another post in this 4-part series.

In next week’s blog post we’ll discuss the basics of company administration, covering aspects of registered offices, registering charges, and company accounts.

In this brief overview of a director’s duties, it’s clear that this area of law can be quite technical. Whether you’re a director, a shareholder or a third party dealing with a company, our team of commercial advocates have the right expertise to advise you. Get in touch with Quinn Legal’s expert business team by calling 01624 665522 or emailing

Alternatively, you can make a free online enquiry on our website.