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Directors Powers And Authority Flashcards

1
Q

Decision required to change the office

A

Directors board resolution

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2
Q

How long is the old office address valid for

A

14 days after notice is filed with registrar

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3
Q

How to change office

A

Board resolution
Notify registrar within 14 days
Complete AD01

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4
Q

How to amend company constitution

A

S21 (1) CA 06- shareholders must pass special resolution

S283(1)- 75% vote

S30(1)- send amended articles to registrar of companies no later than 15 days after changes come into effect

Office to amend in conflict with mandatory provisions of CA

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5
Q

How to change accounting reference date

A

Simple majority of board of directors

If extended in past 5 years cannot do it again

Cannot extend before 18 months

Form AA01
No time limit

Last period onwards or current period onward

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6
Q

Appointment of company secretary

A 
S270(1)- no essential 
Appointed with board resolution
Form AP03 or AP04 if corporate 
Notify registrar in 14 days 
Keep register for inspection 
Directors may revoke secretary at any times and decide terms of pay 
Notify registrar of removal or resignation 
Form TM02 for removal or resignation
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7
Q

Appointment of director S154(1)

A

Every private company must have at least one director aged 16+, and is human

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8
Q

How to appoint a director

A

Shareholder ordinary resolution 50%
Keep register at office for inspection
Update register within 14 days
Form AP01 or AP02 if corporate

Don’t need board resolution to resign

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9
Q

S13 Company Directors Disqualification Act 1998

A

Offence to act if disqualified

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10
Q

What are directors responsible for? What can they do?

A

Directors are responsible for management of the company and can exercise all the company’s powers

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11
Q

How do directors exercise powers?

A

Through board resolutions at meetings

Directors act jointly

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12
Q

How to directors bind the company with third parties?

A

Through actual or apparent authority

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13
Q

What is actual authority?

A

Where the company gives the director specific consent for their actions. Can be express or implied.

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14
Q

What is apparent authority?

A

Director acts without consent of company but still binds company to third party based on representing the company

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15
Q

What if the director exceeds the actual or apparent authority?

A

Will not bind the company but liable to third party for breach
Indemnify the company for any loss
Account for profits

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16
Q

Accounting requirement under S394

A

Ensure full account provided annually

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17
Q

Accounting requirement S393(1)

A

Director shouldn’t approve the annual account unless satisfied that it provides a true and fair view of assets, liabilities, profits and loss of company

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18
Q

Requirement of S415

A

Directors report must be made

Must include review of business with risks, uncertainties and position of business (S417)

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19
Q

Failure to maintain records

A

S389
Failure to maintain records
2 years in prison

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20
Q

Torts

A

Tort by company- director not usually liable
Liable if they commit a tort separate from company
Or if they voluntarily take personal responsibility by creating special relationship between director and third party
Liable if director procures or induces company to commit tort where director acts beyond his role in company

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21
Q

Notice for board meeting

A

Appropriate and reasonable
Can be oral
Notice must specify date time place and nature of business

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22
Q

How many is the quorum

A

Two

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23
Q

Declaring an interest in a board meeting

A

S177 - declare if directly or indirectly interested either written or in board meeting

Give to other Directors at board meeting

State nature and extent of interest

S185- general interest in another company or connection with a person one declaration is enough, not every time.

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24
Q

Effect of declaring an interest

A

Depends on articles
Cannot vote
Effects quorum

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25
Post meeting administration of special board resolution
Must be sent to ROC at CH within 15 days of being made or every officer is in default and liable
26
Post meeting admin for written board resolutions and decisions by unanimous consent
Must be sent to ROC at CH within 15 days of being made
27
Post meeting admin of minutes
S248- minutes must be recorded and kept for 10 years at company’s registered office
28
Can add delegate their powers to employees to make decisions within their job description
Yes MA5
29
What must board meeting notice include
No need to be written | Must include time date and place
30
When can a D not count on board meeting quorum
When decision regards an actual or proposed transaction or arrangement with the company in which D is interested
31
Can D vote and count in quorum for part of meeting only
Yes
32
How are votes counted in board meeting
1 D is 1 vote | Show of hands
33
What percentage is needed to pass a board resolution
Simple majority - over half of those in present must vote in favour
34
S177 interest of D Cannot be disapplied
Where D has a personal interest in a proposed transaction or arrangement with the company they must declare nature and extent to board
35
Exceptions to s177 where D does not have to declare an interest
Not reasonably regarded as likely t give rise to conflict of interest Or To the extent Ds already know it Or If it concerns terms of service contract that has been or are to be considered by meeting of D
36
Does D need to use casting vote for a tie if they are against res
No only use it is in favour or res as without it in a tie it won’t be passed
37
Can a resolution be passed in writing or other form outside of meeting
Yes if unanimous
38
Fraudulent trading
In winding up it appears business was carried on with intent to defraud creditors of company or creditors of any other person Need to show intent to defraud
39
Who brings fraudulent trading action
Liquidator or administrator
40
Consequences of fraudulent trading
If knowingly carrying on business in such a manner they may have to make contributors to company assets
41
What is misfeasance
Breach of fiduciary duty or any other duty
42
Consequences of misfeasance
Contribute to assets | Repair, restore or account for money or property misapplied
43
Elements of wrongful trading
In administration or liquidation Knew or ought to know there was no reasonable prospect of avoiding insolvent liquidation They were D at the time
44
Standard expect of D - wrongful trading
Standard of a reasonably diligent person having regard to The general knowledge, skill and experience expected of a D (objective) And The skill knowledge and experience of that D (subjective)
45
Defence to wrongful trading
Took every step they ought to have taken to minimise loss to creditors
46
How are a breach of Ds duties enforceable / remedies
``` Same as for breach of fiduciary duty: Compensation Account of profits Recission Restoration of property Injunction ```
47
Remedy for breach of Ds duty to exercise all reasonable care skill and dilligence
Common law damages assessed in same way as negligence
48
Can a beach of Ds duty be ratified
Yes but D in question cannot vote on it
49
S182 CA 2006
Where D is directly or indirectly interested in a transaction must declare nature and extent to other Ds ASAP
50
Exceptions to duty under s182
If D is not aware of interest (taken as aware of matters he ought to reasonably be aware of) Interest unlikely to give rise to conflict Ds already know or ought to know Concerns service contract
51
Differences between s182 duty and Ds duty to declare interest
Failure to declare is criminal offence under s182 but civil matter in Ds duties Under s182 declaration must be made at meeting of Ds or by notice in writing sent to all other Ds or notice of interest at board meeting
52
Who can remove auditor
S
53
What must auditor do before leaving
Make statement about why they’re leaving
54
How long to register shares and issue certificate
2 months
55
What must an S register say if there is only one S
Must be a statement saying this on the register or criminal offence
56
Where to keep S register and who can inspect it
Keep at office or SAIL S can inspect for free Anyone else can inspect for a fee
57
Do you always have to keep a PSC register
Yes even if no one is on it
58
Can a PSC register be private
Yes can apply to keep it private | It will say how many PSC and how many shares they have but won’t say their names
59
Ways D can be liable in connection with office as D
Failure to file docs at CH - fine Environmental leg Breach of health and safety Failure to maintain company records - fine or 2 years prison Making political donations without approval Bribery Breach of responsibility regarding accounting records
60
How long can a Ds disqualification last
2-15 years
61
Grounds for disqualification of D
``` Fraud on winding up Breach of competition law Unfit D of insolvent company Conviction for an indictable offence Persistent breach of company leg Summary conviction for failure to file required notice or doc Investigation and finding of unfitness ```
62
Effect of a Ds disqualification order
Cannot be a D or in any way concerned with promotion, formation or management of a company without leave of court
63
Consequences of breach of Ds disqualification
Offence - 2 years imprisonment D who is disqualified is personally liable for debts of company if involved in management while disqualified
64
Who do the restrictions regarding long term service contracts, payment for loss of office loans to D and substantial property transactions apply to
Ds and shadow Ds
65
What is a payment for loss of office
A payment to D when directorship ends Includes when S is selling shares and the price is in excess of price other S could have obtained
66
Who approves a payment for loss of office
If £200 or more (unless D is legally entitled to it) will need ordinary S res
67
What payments to Ds require ordinary S res
Payment to past D Payments to person connected to D Payment to anyone at direction of or for benefit of a D or person connected to D
68
What if a payment to D is made without ordinary S res
It is held on trust for the company | D recieving it and D authorising it are jointly and severally liable to indemnify company for loss
69
Procedure to have a payment to D for loss of office authorised
Memo with details of payment must be at office for 15 days prior to GM or send with written res
70
Who approves a loan to D, holding company or security for such a loan
Ordinary S res | If D is also a D of holding company then it must also pass ordinary S res
71
What if a loan is given to D, holding company or security for such loan without an S res
Voidable at company’s discretion Can be affirmed by company D who loaned money and D who authorised it are jointly and severally liable to account for gain and indemnity company for loss
72
Procedure for getting a loan to D, holding company or security for such a loan
Memo setting out terms at office for 15 days prior to GM | Or send with written res
73
Exceptions to requirement for ordinary res for loan to D, holding company or security for such a loan
Expenditure for purposes of company or D performing duties (max 50k) Expenditure on defending legal proceedings Expenditure on defending investigation by regulatory authorities Minor business transactions (max 10k)
74
What is a substantial property transaction
D or person connected to D buys or sells non cash asset to company worth £100k or £5 and 10% of company net asset value
75
Who authorises substantial property transaction
Ordinary S res
76
Who is a person connected to D
Family or company in which D or Ds relative owns 20%
77
Substantial property transaction exceptions that don’t need S res
Transactions between 2 wholly owned subsidiaries of the same holding company Company is a wholly owned subsidiary of any other company Transaction between company and a person in his character as a member of that company Transaction between holding company and its wholly owned subsidiary
78
What if a substantial property transaction isn’t approved with S res
Voidable Person with who company entered into arrangement and D who authorised it may have to account for gain or indemnity company

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