Directors Duties

Question 1

Legislation

Answer 1

Companies act 2006

Question 2

Directors

Answer 2

Legally responsible for running a business

Question 3

s.171

Answer 3

Duty to act within powers

Question 4

s.172

Answer 4

Duty to act in good faith

Question 5

s.173

Answer 5

Duty to exercise independent judgement

Question 6

s.174

Answer 6

Duty to exercise reasonable care, skill and diligence

Question 7

s.175

Answer 7

Duty to avoid conflict of interest

Question 8

s.176

Answer 8

Duty to not accept benefits

Question 9

s.177

Answer 9

Duty to declare interest in proposed transaction or agreement

Question 10

Duty to act within powers

Answer 10

1 - must act in accordance to companies principles and exercise their powers for purposes they were conferred

Question 11

Duty to act in good faith

Answer 11

2 - act in a way they believe will promote success of the whole company, considering all members

Question 12

Duty to exercise independent judgement

Answer 12

3 - develop their own informed view on company activities

Question 13

Duty to exercise reasonable care, skill and diligence

Answer 13

4 - must perform functions with “ “ expected from person with that knowledge and expertise

Question 14

Duty to avoid conflict of interest

Answer 14

5 - must declare if arrises, relationship with other entity, personally benefit

Question 15

Duty to not accept gifts or benefits from third parties

Answer 15

6 - may be allowed reasonable corporate hospitality if no CoI

Question 16

Duty to declare interest in proposed transaction or agreement

Answer 16

7 - if personally benefit from transaction