The Companies Act does not define the term “misfeasance” used in various
Sections e.g. 166 (b) and 324 (1).
This is a wrongful act or omission committed or omitted a person charged with a specific
Responsibility.
It is neither a crime nor a tort and does not cover acts or omissions of negligence.
It is a contravention of principles of law or equity.
Misfeasance proceedings may be instituted against directors, promoters, liquidator or officers of the company and Courts of Law are empowered to assess the damages payable such persons for the act or omission e.g. in the course of winding up.
Examples of misfeasances include:
Making of secret profit promoters or director
Making of improper payments made promoters or directors
Application directors of the company‟s assets for anultra vires or illegal object
Payment of dividend out of capital
Making of fraudulent preferences
Sale of company assets at undervalue
