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BLP > Directors (SGSs 11,13) > Flashcards

Directors (SGSs 11,13) Flashcards

1
Q

Directors must declare to the Board any direct or indirect interest in a proposed transaction

A

s.177(1) CA 2006

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2
Q

Declaration of interest in a proposed transaction should take place before the transaction is entered into

A

s.177(4) CA 2006

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3
Q

Directors should declare interests in existing transactions

A

s.182(1) CA 2006

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4
Q

Directors should declare interests in existing transactions as soon as is reasonably practicable

A

s.182(4) CA 2006

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5
Q

Indirect interests include where a Director is a shareholder in a company with which a transaction is proposed

A

Re British American Corp

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6
Q

The director can give notice of an interest in a transaction orally at a BM

A

s. 177(2)(a) CA 2006 [for proposed transaction]

s. 182(2)(a) CA 2006 [for existing transaction]

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7
Q

If the interest in a transaction is a non-recurring interest, then the Director can make a written declaration

A

s.184 CA 2006

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8
Q

Where the interest in a transaction is long-term and likely to be of recurring relevance, then the Director can give the company general notice of the interest, stating the nature and extent of their interest

A

s.185 CA 2006

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9
Q

A director does not need to declare an interest if:

  1. It cannot reasonably be regarded as likely to give rise to a conflict of interest
  2. The other Directors are already aware of it; or
  3. It concerns the terms of their service contract
A

s. 177(6) CA 2006 [for proposed transaction]

s. 182(6) CA 2006 [for existing transaction]

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10
Q

Where there is a conflict of interest, the Director can not vote or count towards the quorum in relation to that particular issue

A

MA 14(1)

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11
Q

Exceptions to rule MA 14(1) are laid out in this statute

A

MA 14(3)

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12
Q

Exceptions to rule MA 14(1) are:

A
  1. The company misapplies MA 14 by OR;
  2. The interest cannot reasonably be regarded as giving rise to a conflict; or
  3. The interest arises from a permitted cause (MA 14(4))
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13
Q

Duties are owed by the Director to the Company

A

s.170(1) CA 2006

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14
Q

Directors’ duties are found in these statutes

A

s.171-177 CA 2006

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15
Q

Remedies are available to the Company for a Directors’ breach of duty
[relevant case law]

A

Foss v Harbottle

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16
Q

Remedies available for breach of duties found in ss.171-173 and ss.175-177
(s.178(1) CA 2006)

A
  1. Damages
  2. To account to Company for any profits
  3. Restore any property
  4. Injunction if threat of future breach
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17
Q

Remedies available for breach of duty found in s.174 CA 2006

s.178(2) CA 2006

A

Damages only

18
Q

Directors have a general power to manage the company’s affairs to ‘exercise all powers of the company’

A

MA 3

19
Q

Directors can delegate any of their powers to any person or committee

A

MA 5

20
Q

Directors have the power to determine their own remuneration

A

MA 19(2)

21
Q

Directors must get the Members approval by OR before they can grant a Director a service contract longer than 2 years

A

s.188 CA 2006

22
Q

Before Members vote on a service contract (2 years or longer), they must have an opportunity to see a memorandum setting out the contract

A

s.188(5) CA 2006

23
Q

If a service contract (2 years or longer) is approved, the Company must make it available at its registered office or SAIL and notify the registrar of the place where it is available

A

s.228 CA 2006

24
Q

If a company agrees to a service contract (2 years or longer) without the required approval, the contract is void to the extent that it contravenes s.188 (i.e. it will last 2 years at most)

A

s.189 CA 2006

25
Q

A company may not make a loan to a Director without approval of Members by OR

A

s.197(1) CA 2006

26
Q

A company may not make a quasi-loan to a Director without approval of Members by OR

A

s.198(2) CA 2006

27
Q

A company may not make a loan or quasi-loan to a person connected to a Director without approval of Members by OR

A

s.200(2) CA 2006

28
Q

Connected persons defined in this statute

A

s.252 CA 2006

29
Q

A company may not enter into a credit transaction with a Director or a person connected to a Director without approval or Members by OR

A

s.201(2) CA 2006

30
Q

Approval is not required if the aggregate of the value of the loan transaction and any other related loan does not exceed £10,000

A

s.207(1) CA 2006

31
Q

Approval is not required if the aggregate of the value of the guarantee transaction and any other related transaction does not exceed £15,000

A

s.207(2) CA 2006

32
Q

Consequences of contravention for transactions with Directors (loans, quasi-loans, credit transactions)
[relevant statute where they can be found]

A

s.213 CA 2006

33
Q

Exceptions to requirement for approval for transactions with Directors can be found in these statutes

A

ss.204-209 CA 2006

34
Q

A company cannot enter into an arrangement with a director of the company or its holding company (or person connected with director) to acquire a substantial non-cash asset, without an ordinary resolution of the company’s shareholders.

A

s.190(1) CA 2006

35
Q

If the director (or person connected) is a director of the company’s holding company the arrangement has to be approved by the holding company also

A

s.190(2) CA 2006

36
Q

If the company is a wholly-owned subsidiary the holding company would need to pass an ordinary resolution

A

s.190(4)(b) CA 2006

37
Q

Definition of substantial transaction is found in this statute

A

s.191 CA 2006

38
Q

Consequences of no shareholder approval before substantial property transaction found in this statute

A

s.195 CA 2006

39
Q

Transaction entered without shareholder approval can be affirmed within reasonable time period by ordinary resolution of the company or holding company

A

s.196 CA 2006

40
Q

Ratification of director’s conduct amounting to negligence, default, breach of duty or breach of trust in relation to a company

A

s.239(1) CA 2006

BLP (8 decks)

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