Liability of Directors in a Limited Company.

Abstract

In this thesis, two major tasks were carried out. First of all, the duties of directors in Limited Company under the Rwandan Law were discussed. Secondly, the analyses of directors’ liabilities in limited company were done, and proposals to reform the Rwandan Company Law were made. For the first issues, the researcher found that the duties of a company director whether in Rwanda or anywhere else stem from the company’s law and/ or articles of association. The duty of care and due diligence, loyalty as well as observing other statutory provisions applicable to all limited liability companies has to be given priority by the director, failure of which will lead to his liability for mismanagement, breach of statutory provisions or by-laws more especially where loss or damage has been caused by such behavior. However in second point, the researcher found that in Rwanda companies ‘law, there are some provisions which provide that directors are civil, or administrative and penal liable if she/he breach the laws and regulations related to his/her duties. However, there are some gaps in the Rwanda companies’ law which require the improvement in order to implement the good governance in limited companies. The purpose of this thesis was mainly to examine the liability of directors. The issues were explored through an analysis of Rwandan legislation in general and companies law especially. More important problems are related to issues such as avoidance of conflict of interest, the ambiguous provisions and the lack of the limitation mechanism of directors’ liability. During or after the assessment, the researcher makes some comments on those issues, offer the opinions and make the suggestions about the improvement of the provision on liability of directors in a limited company under Rwandan law.