What is the liability of a non working director with no salary in legal matters against the company?
Answer:
directors are liable for the all the running of a co. as the rep. of the shareholders. all internal affairs and accounts are the BoD's responsibility.
however the directors can relieve them of their liabilities if they can prove that the reponsibility, the irregularity in which they are accused of, was specifically the responsibility of some other person.
The lack of being paid a salary will not get your father off the hook for potential liability.
As a director, his personal liability and responsibilities are determined by the law of the jurisdiction in which the company was organized. Typically, most jurisdictions impose fiduciary duties on all directors, in which they are required to act in the best interests of the company.
Altho a long time ago directors were generally not held to be responsible or liable for matters not in their personal knowledge, at this point in time, most states in the US (based on Delaware Chancery Court cases) recognize a duty on directors to be informed about the company's affairs, and to be responsible to cause the company to establish appropriate controls so as to reduce the likelihood of noncompliance with legal requirements by the company and its management.
Your father should definitely hire an attorney as soon as possible, and he also should try to establish whether the company in question had purchased directors and officers liability insurance, which may provide some protection to him by covering expenses of defense of claims against him, and covering any judgement for money obtained by the person or class of persons suing him and other directors.
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