How do I proceed if one of my directors is running a secret company?

How do I proceed if one of my directors is running a secret company?

How do I proceed if one of my directors is running a secret company?

Answer: 

Directors of companies have specific duties to the company (known as fiduciary duties), which oblige them to act in the best interests of the company, even if those interests conflict with their own personal interests. 

Sometimes directors try to syphon parts of the business off into their own companies, so that they can retain the profit for themselves.  If you become aware of a director doing this it is important to challenge the behaviour as soon as possible to avoid any suggestion that you have accepted it by conduct.  Recovering loss for the company is more difficult than preventing it occurring in the first place.  If you become aware of any activity like this, it is important to seek legal advice as soon as possible so that you can assess your options.

Generally speaking, there are far more options open to you at an early stage of a dispute than later on, when positions have become entrenched, or serious damage has already been done to the business.

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