Directors' Powers and Authority
- Created by: KG1999!
- Created on: 16-08-23 19:20
View mindmap
- Directors' Powers and Authority
- Company's Constitution (** 17, 29 and 32 of CA 2006)
- the company’s articles of a**ociation
- its certificate of incorporation
- its current statement of capital
- copies of any court orders and enactments (ie legislation) altering the company’s constitution
- resolutions (shareholders’ decisions) affecting the constitution
- agreements involving shareholders which affect the constitution
- Every private company MUST have at least one director s154(1) and public AT LEAST two s154(2)
- Directors
- Executive - employee in company with power to delegate and authority to run company day to day
- Non-Executive - no day-to-day participation, votes. Not company employee
- Chairman - Leads board and SH meetings. Powers determined by articles. Casting Vote MA13
- Shadow - Not appointed, influences decisions
- De Facto - Never appointed but perform functions
- Alternate - Attends board meetings in place, rules governed by articles
- Powers (Model Article 3)
- Pa**ing Board resolutions - some decisions may need SH decision
- Special Resolution (MA 4)
- Articles can be changed under s21 CA to take certain powers from directors (75% SH majority)
- removal by ordinary resolution
- Duties
- These are owed to the company and its creditors if it approaching insolvency - they must act in their best interests
- Actual authority = company has expre**ly authorised their actions
- Apparent/ostensible = where third party under rep from the company by word or conduct that they are dealing with someone acting with the company's authority
- Directors must promote succe** s172, exercise independent judgement s173, reasonable care skill and diligence s174, avoid conflicts s175 and not accept benefits from a third party s176
- s177 - Declaring interest in transaction with the company - board needs full disclosure and aware they have a personal interest
- Declaration must be made before it is entered into. Orally, by notice in writing, general notice is repeated - approval must be given at the BM
- Cannot vote under Art 14(1) in relation to the decision. If they are unaware of their interest or it cannot be reasonably be regarded as giving rise to conflict then disclosure is not required.
- Liability
- Companies bound by contracts whether director was acting with actual or apparent authority
- Must indemnify the company for any lo** suffered and account for any profit made
- Where they act outside the scope of then the company will not be bound by their actions and the director will be personally responsible
- s40(2) - party dealing is not bound to check directors' powers
- Decision Making
- MA9 - Any can call a BM as long as there is reasonable notice (date and time, location, how Ds communicate if not present, orally, given to each D
- Quorum - minimum amount of Ds required by articles to be present for valid decisions - if private company 11(a) TWO
- Director cannot be excluded from quorum unle** they have an interest that causes conflict or concerns them buying shares (s21 can alter this)
- Ds can call GM if pa**es at BM. Alternative to a BM is a written resolution (all directors must agree as per 8(1)). If they share a common view then it can be taken unanimously
- Company's Constitution (** 17, 29 and 32 of CA 2006)
Comments
No comments have yet been made