What constitutes breach of fiduciary duty?

A Director of a limited Company must act in the best interests of the Company, free of any conflicts of interest. So, the Director cannot use Company property for their own personal use as the Company is in law a totally separate entity.

A breach of fiduciary duty does not have to be fraud as such. A breach of fiduciary duty is a civil action in which the Claimant claims damages for lost profits arising out of a breach of duty by a Director or person in a fiduciary relationship.

Damages may also be recovered in negligence if it is held that a Director has failed in their duties towards the Company. A Director can be guilty of carelessness or recklessness and, where this is proven to be the case, the Director may well to be found to be responsible for any resulting loss to the Company's shareholders.

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