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Under the Companies Acts and common law,
directors of companies have duties not to:
- misapply company money
- retain or misapply company property
- breach any duty of trust when dealing with company money.
Section 212 of the 1986 Insolvency Act makes a director
personally accountable to pay
back to the company the amount of the loss to the extent
that the court so orders.
PURNELL v LEWIS
In this case the liquidator, Purnell,
took proceedings against the director, Lewis.
The basis of the action was the failure
of the director to properly deduct PAYE from wages paid
to employees. The director had for several years paid a
substantial part of all employees wages "in cash".
In consequence this was a substantial
loss to the Inland Revenue.
The court ordered the director to personally
repay the amount of lost PAYE.
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