Chapter 8: Companies- ownership & management Flashcards
How many directors are needed for private and public companies
Private= min 1
Public= min 2
What is a de facto and de jure director
de facto= Acts but isn’t
de jure= appointed legally
What is an executive, NED, MD and chairman
executive= full time and part of management
NED= part-time, external and brings expertise
MD= day to day management of business
chair= NED who ensures procedure is followed
When should new appointments (directors) be shared with Registrar?
within 14 days
When should director quit
Law, bankrupt, in debt, physically or mentally incapable
List 3 duties of director
promote success, avoid conflict of interest, not accept benefit from 3rd party
What is the max penalty for disqualification and breach of company act consistently
15 years and 5 years max
What is a derivative claim?
lets a company member sue a director on the company’s behalf for wrongdoing, but needs court approval. Occurs where breach of duty or negligence.
(member= shareholder)
What is an Annual General Meeting and who needs to hold it? How many days notice is required?
Public companies
Considers accounts, appoint auditors, elect directors, declare dividends. 21 days notice required
What is required to remove a director
Special notice within 28 days. Director (aka member) can request written rep to be shared. They are then removed by Ordinary Resolution
Special notice and Ordinary Resolution
What resolution type is needed for amendments of articles?
Special
What is wrongful trading and what is the punishment
Directors can be held liable if they knew a company was going bust and didn’t try to protect creditors.
up to 15 years disqualification
What happens if you breach disqualification order
fine and imprisonment and personally liable for debts
What cannot be used for removal of director/auditor
Written resolutions cannot be used for removal of an auditor or director.
What is required to appoint?
Ordinary Resolution
