Duty to creditors
The principle that directors must give increasing weight to creditors’ interests when insolvency is probable or the company is insolvent.
Related terms
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Fiduciary duty
A duty to act loyally and properly in another party’s interests, such as duties owed by company directors to the company.
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Breach of fiduciary duty
A failure by someone in a position of trust, such as a director, to comply with duties owed to the company or others under the law.
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Trading while insolvent
Continuing to operate a business when it is insolvent. This is not automatically unlawful, but directors must act carefully and comply with duties to creditors.
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