Directors' Role Flashcards
The role of directors
What authority do the director’s have to manage the company?
Generally the board are free to make decisions on behalf of the company on all matters unless the articles provide otherwise.
Can the board delegate decisions?
Yes, the board can delegate particular decisions to a director or to a committee.
What kind of directors are there in law?
Three kinds:
- de jure
- de facto
- shadow
What kind of directors are there in practice?
There are executive and non-executive directors
What is a de jure director?
A de jure diretor is a director who has been validly appointed at law.
How many directors must a company have?
A private limited company must have at least one director and a public limited company must have at least two directors.
At least one director must be a natural person.
Is there a maximum number of directors a company can have?
Not under CA 2006. Can put a maximum number in the articles.
Who can be a director?
Anyone over the age of 16. Both natural and legal people.
What is a de facto director?
Someone who assumes to act as a director but who has not been validly appointed as such.
Who is a shadow director?
A shadow director is someone in whose directions or instructions the board is accustomed to act on.
Professional adviser are not to be regarded as shadow directors.
Why does identifying de jure, de facto and shadow directors matter?
It matters because they are all subject to the duties, obligations and restrictions under various legislation.
Does the distinction between executive and non-executive directors matter?
Not in law. Duties, obligations and restrictions apply to them equally.
What is an alternate director?
An alternate director is usually either a fellow director of the company or someone who has been approved by a board resolution to stand in for a director and assume their voting rights.
What is the role of company secretary?
The are responsible for the administrative requirements of a company, including keeping internal books up-to-date, produce board minutes and general meetings minutes, and do all necessary filings at Companies House.
Does a company need a secretary?
Private companies - no.
Public companies - yes.
