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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3671
Experience:  Solicitors 2 years plus PQE
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Director says they will leave and take some of companies clients

Resolved Question:

director says they will leave and take some of companies clients with them (the higher earning accounts). Can they be held liable for taking a company 'asset' in doing that and be sued to repay any monies they get from those clients?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi, Thank you for your question. When he says he is taking the clients - will the clients go with him voluntarily? If he leaves the company he is perfectly entitled to pursue clients on his own (unless he has a non compete clause in an employment contract or consultancy agreement) but that does not mean the clients have to go with. What he cannot do is take confidential information from the company i.e data base of client contacts for example or poach the clients to a new company while he remains a director. Kind regards AJ
Customer: replied 2 years ago.

We are a training company and he has been both the client contact and deliverer of training on behalf of our company for the clients. He has his own training company (just him) which he intends to use to invoice our clients in the future when he does training delivery work for them - while still intending to remaining a director of our company from which these clients were 'stolen'.

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you for your question.
If he remains as a director, then that type of conduct will be in breach of the Sections 172-177 of the Companies Act 2006. Specifically S.175 - duty to avoid conflict.
If he started stealing clients and remained a director, then the company would have grounds to sue and account for the profit made.
Kind regards AJ
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