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BLP > Directors Powers And Authority > Flashcards

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
Q

Post meeting administration of special board resolution

A

Must be sent to ROC at CH within 15 days of being made or every officer is in default and liable

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26
Q

Post meeting admin for written board resolutions and decisions by unanimous consent

A

Must be sent to ROC at CH within 15 days of being made

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27
Q

Post meeting admin of minutes

A

S248- minutes must be recorded and kept for 10 years at company’s registered office

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28
Q

Can add delegate their powers to employees to make decisions within their job description

A

Yes MA5

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29
Q

What must board meeting notice include

A

No need to be written

Must include time date and place

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30
Q

When can a D not count on board meeting quorum

A

When decision regards an actual or proposed transaction or arrangement with the company in which D is interested

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31
Q

Can D vote and count in quorum for part of meeting only

A

Yes

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32
Q

How are votes counted in board meeting

A

1 D is 1 vote

Show of hands

33
Q

What percentage is needed to pass a board resolution

A

Simple majority - over half of those in present must vote in favour

34
Q

S177 interest of D

Cannot be disapplied

A

Where D has a personal interest in a proposed transaction or arrangement with the company they must declare nature and extent to board

35
Q

Exceptions to s177 where D does not have to declare an interest

A

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
Q

Does D need to use casting vote for a tie if they are against res

A

No only use it is in favour or res as without it in a tie it won’t be passed

37
Q

Can a resolution be passed in writing or other form outside of meeting

A

Yes if unanimous

38
Q

Fraudulent trading

A

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
Q

Who brings fraudulent trading action

A

Liquidator or administrator

40
Q

Consequences of fraudulent trading

A

If knowingly carrying on business in such a manner they may have to make contributors to company assets

41
Q

What is misfeasance

A

Breach of fiduciary duty or any other duty

42
Q

Consequences of misfeasance

A

Contribute to assets

Repair, restore or account for money or property misapplied

43
Q

Elements of wrongful trading

A

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
Q

Standard expect of D - wrongful trading

A

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
Q

Defence to wrongful trading

A

Took every step they ought to have taken to minimise loss to creditors

46
Q

How are a breach of Ds duties enforceable / remedies

A 
Same as for breach of fiduciary duty:
Compensation 
Account of profits
Recission 
Restoration of property 
Injunction
47
Q

Remedy for breach of Ds duty to exercise all reasonable care skill and dilligence

A

Common law damages assessed in same way as negligence

48
Q

Can a beach of Ds duty be ratified

A

Yes but D in question cannot vote on it

49
Q

S182 CA 2006

A

Where D is directly or indirectly interested in a transaction must declare nature and extent to other Ds ASAP

50
Q

Exceptions to duty under s182

A

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
Q

Differences between s182 duty and Ds duty to declare interest

A

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
Q

Who can remove auditor

A

S

53
Q

What must auditor do before leaving

A

Make statement about why they’re leaving

54
Q

How long to register shares and issue certificate

A

2 months

55
Q

What must an S register say if there is only one S

A

Must be a statement saying this on the register or criminal offence

56
Q

Where to keep S register and who can inspect it

A

Keep at office or SAIL
S can inspect for free
Anyone else can inspect for a fee

57
Q

Do you always have to keep a PSC register

A

Yes even if no one is on it

58
Q

Can a PSC register be private

A

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
Q

Ways D can be liable in connection with office as D

A

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
Q

How long can a Ds disqualification last

A

2-15 years

61
Q

Grounds for disqualification of D

A 
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
Q

Effect of a Ds disqualification order

A

Cannot be a D or in any way concerned with promotion, formation or management of a company without leave of court

63
Q

Consequences of breach of Ds disqualification

A

Offence - 2 years imprisonment

D who is disqualified is personally liable for debts of company if involved in management while disqualified

64
Q

Who do the restrictions regarding long term service contracts, payment for loss of office loans to D and substantial property transactions apply to

A

Ds and shadow Ds

65
Q

What is a payment for loss of office

A

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
Q

Who approves a payment for loss of office

A

If £200 or more (unless D is legally entitled to it) will need ordinary S res

67
Q

What payments to Ds require ordinary S res

A

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
Q

What if a payment to D is made without ordinary S res

A

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
Q

Procedure to have a payment to D for loss of office authorised

A

Memo with details of payment must be at office for 15 days prior to GM or send with written res

70
Q

Who approves a loan to D, holding company or security for such a loan

A

Ordinary S res

If D is also a D of holding company then it must also pass ordinary S res

71
Q

What if a loan is given to D, holding company or security for such loan without an S res

A

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
Q

Procedure for getting a loan to D, holding company or security for such a loan

A

Memo setting out terms at office for 15 days prior to GM

Or send with written res

73
Q

Exceptions to requirement for ordinary res for loan to D, holding company or security for such a loan

A

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
Q

What is a substantial property transaction

A

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
Q

Who authorises substantial property transaction

A

Ordinary S res

76
Q

Who is a person connected to D

A

Family or company in which D or Ds relative owns 20%

77
Q

Substantial property transaction exceptions that don’t need S res

A

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
Q

What if a substantial property transaction isn’t approved with S res

A

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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