Directors' Powers and Authority

Question 1

Decisions that can only be taken by shareholders

Answer 1

• Changing the company name (s77 CA)
• Changing the company’s articles of association (s21 CA)
• Removing a director (s168 CA)
• Ratifying a director’s breach of duty (s239 CA)
• Disapplying pre-emption rights (s569 and s570 CA)

Question 2

Decisions that can be taken by the shareholders or directors

Answer 2

• Appointing a new director (MA17)

Question 3

Decisions of the directors which require shareholder approval

Answer 3

• Approving a director’s service contract for a fixed term of more than two years (s188 CA)
• Approving the company entering into a substantial property transaction (s190 CA)
• Approving the company lending money to a director (s197(1) CA)
• Approving making a compensation payment to a director for loss of office (s217 CA)
• Approving the payment of a dividend (MA 30)
• Authorising the issuing of new shares in the company if the directors do not have the requisite authority (s551 CA)
• Authorising a buy-back of shares by the company (s694 and s716 CA)
• Authorising the company to reclassify some of its share capital as distributable profits (s641 CA)

Question 4

Voting at a General Meeting of the company’s shareholders

Answer 4

1. show of hands
   - each member present, irrespective of the number of shares they hold, has one vote
2. poll vote
   - each member has one vote per share that the voting member holds, meaning members with more shares have more votes