Director's liability for promoter's gift meaning

This describes a director’s obligation to account to the company for any gift, commission or other benefit received from a promoter in connection with the company’s formation or flotation. It is a descriptive expression grounded in directors’ fiduciary duties and anti-bribery law, developed by case law and (in the UK) statute. Across England & Wales, Scotland and Northern Ireland, Companies Act 2006 section 176 prohibits directors from accepting third‑party benefits that could give rise to a conflict of interest; acceptance of a promoter’s gift will usually breach this duty. Remedies include an account of profits and a constructive trust over the benefit (FHR European Ventures v Cedar Capital), and potential rescission of any transaction procured by the gift. Criminal liability may arise under the Bribery Act 2010. Mere disclosure does not by itself cure the breach; the test is whether the benefit could reasonably be regarded as creating a conflict. In Ireland, the position is broadly consistent. Directors’ fiduciary duties are codified in the Companies Act 2014 (notably the duty to avoid conflicts), with similar equitable remedies and criminal exposure under the Criminal Justice (Corruption Offences) Act 2018. By analogy, officers and company agents are likewise accountable for secret commissions from promoters.