04. directors Flashcards
what are some of the decisions reserved for shareholder approval?
- change of name (unless Articles provide otherwise)
- amending Articles
- removing directors
- removing auditors
a Board with MA is usually free to make all other decisions (MA 3)
what is MA 5?
allows the Board to delegate particular decisions and responsibilities for the day-to-day running of the company to one of the directors or to a committee.
e.g., An HR Director might be delegated decision-making with regards to the HR decisions of a
company.
how can directors be legally held to account?
civil and criminal actions under the Companies Acts
found guilty of criminal actions and sentenced under:
- Fraud Act 2006
- Theft Act 1968
- insider dealing under Criminal Justice Act 1993
- money laundering under Proceeds of Crime Act 2002
can a company have a corporate as its only director?
no, every company must have at least one
director who is a natural person
maximum no of directors in MA
no maximum
age restrictions on directors
at least 16 years old
de jure director
director who has been validly appointed at law
fiduciary duties and liabilities apply
de facto director
someone who assumes to act as a director but who has not been validly appointed as such
fiduciary duties and liabilities apply
shadow director
‘a person in accordance with whose directions or instructions the directors of the company are
accustomed to act’; ‘behind the scenes’
fiduciary duties and liabilities apply
who cannot be a shadow director?
a professional advisor
executive director
generally spend the majority, if not all, of their working time on the business of the company
✅officer
✅employee
Examples include a Finance Director, Managing Director, Marketing Director.
non-executive director
✅officer
❌employee
Non-executive directors do not take part in the day-to-day running of the company.
generally provide independent guidance and advice to the board and to protect the interests of shareholders.
alternate director
usually either a fellow director of the company or
someone who has been approved by a resolution of the board of directors
same voting powers as absent director
company secretary
officer of the company who deals with the
company’s legal administrative requirements.
do public and private companies need to have a company secretary?
✅public
❌private
appointment of a director for companies with MA (two options)
- ordinary resolution of the shareholders (more than 50%)
- board resolution of the directors (more than 50%)
in practice, board resolution
can rules on appointment of a director be altered?
yes, Articles can be amended
are all directors entitled to payment for their services?
no, only directors who are also employees with service contracts are
can an individual be a director/officer, shareholder and an employee?
yes
in relation to directors, what registers must the company maintain?
- register of directors
- register of secretaries
who should be notified of a change to directors?
AP01 - Companies House
who should be notified of a change to company secretary?
AP03 - Companies House
The information kept at Companies House is available for inspection by who?
the public
the register kept at a company’s registered office must be open for inspection by who?
- any member of the company - without charge
- any member of the public - for a free