ENGLAND & WALES Law and Practice Contributed by: James Ross, Paolo Palmigiano, Debbie Cloake, Helen Farr, Debbie Heywood and Louise Popple, Winston Taylor
For PLCs, there are a number of further reporting and disclosure requirements that are set out by the market regulators. If companies fail to comply with their ongoing report - ing and disclosure obligations, various penalties and consequences may apply. 3.4 Management Structures In the UK, entities are typically organised under a one- tier system, with a single board of directors responsi - ble for both the strategic direction and the day-to-day management. Combining oversight with active man - agement in a single body streamlines the decision- making process. The board of directors is usually made up of executive and non-executive directors – executive directors are responsible for the daily operations of the company, and the non-executive directors bring an independ - ent perspective and oversee the performance of the executive directors. 3.5 Directors’, Officers’ and Shareholders’ Liability Directors and officers of both private companies and PLCs have fiduciary duties towards the company, which include acting within their powers, promoting the success of the company for its members’ ben - efit, exercising independent judgment and reasonable care, skill and diligence and avoiding conflicts of inter - est. The main rules that govern the duties of directors in the UK are set out in the CA2006. If directors breach their fiduciary duties, they could face civil proceedings. In some cases, criminal liabil - ity may arise under company or insolvency legisla - tion – eg, for fraud, wrongful trading or false filings at Companies House (or some other CA2006 breaches). If a PLC is listed on a stock market, its directors could face criminal liability for breaches of financial services or market regulation – eg, the Market Abuse Regu - lations, Financial Services and Market Act 2000 or Criminal Justice Act 1993. In addition, there are some areas of legislation that impose personal liability on a company’s directors for actions by the company or associated people, includ -
ing in relation to health and safety, environmental mat - ters, bribery, fraud, tax evasion and corporate man - slaughter. The principle known as “piercing (or lifting) the cor - porate veil” exists in English law. Typically, a com - pany is seen as a distinct entity from its shareholders, although the court may decide to pierce this “veil”. This principle is only applied by courts in exceptional circumstances where the company has been used as a vehicle for fraud or improper conduct, or where the individuals behind a company have abused the corpo - rate structure to shield themselves from liability or to perpetrate wrongdoing. Case law provides that it can only be justified when the more conventional remedies are all seen to be inadequate. The legal rules governing the employment relationship are multifaceted and can be categorised as follows. Statutory Law This comprises legislation enacted by Parliament that sets out various rights and obligations for employers and employees. Key statutes include the Employment Rights Act 1996 (ERA1996), the Equality Act 2010 (EA2010), the Health and Safety at Work etc. Act 1974 and the Employment Rights Act 2025 (ERA2025). The ERA2025 represents a significant overhaul of UK employment law. It came into force on 18 December 2025; however, many of the changes will only take effect in 2026 and 2027. The following laws, depending on the stage of employ - ment in question, are of particular note. • Recruitment: (a) EA2010; (b) Rehabilitation of Offenders 1974; and (c) the Data Protection Act (DPA) 1998. • Pre-employment checks: (a) the Safeguarding Vulnerable Groups Act 2006; and (b) the Immigration, Asylum and Nationality Act 2006. 4. Employment Law 4.1 Nature of Applicable Regulations
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