Under general company law, who can bring an action for negligence against a director?

Study for the ICAEW ACA Certificate Level - Law Test. Dive into multiple choice questions and detailed explanations to prepare effectively. Get ready for your exam!

The ability to bring an action for negligence against a director primarily lies with the company itself or any member acting on the company's behalf. This is rooted in the principle that any breach of duty by a director is a violation of their obligations to the company, rather than to individual shareholders or external parties.

When a director fails to fulfill their duties, which can include acting with care, skill, and diligence, it is the company that bears the consequence of such failures. Therefore, the proper plaintiff in such a case is the company, since the harm caused by the negligence affects the company as a whole.

Additionally, individual members (often shareholders) can also bring an action on behalf of the company through a derivative action, especially when the company itself fails to pursue a claim against its directors. This mechanism allows shareholders to serve the best interests of the company in situations where those in charge may not act, thereby upholding the principle of accountability within company governance.

The other options are limited in scope. For instance, shareholders alone cannot bring an action solely in their personal capacity, nor can only members of the board take action against their peers. Creditors do not typically have standing to sue for breaches that directly relate to the director's duties to the company, unless their

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