Limited Companies Part 2 Flashcards
Shareholders always appoint new directors. True or false?
False
When do directors service contracts require shareholder approval?
Where the term is for more than two years.
Shareholders must always approve a property transaction which exceeds 100k in value. True or false?
False
What type of resolution is required to remove a director from office?
Ordinary Resolution
What is meant by a minority shareholder?
Owns less than 50% of voting shares
What are shadow directors?
Someone who is not appointed as director but exercises a major influence on directors
What is a de facto director?
Someone who has not been appointed properly as director, but performs the role of a director.
Can a company be a director of another company?
Yes, but there must be at least one human director.
What is a non-executive director?
A director who does not have an employment/service contract. Still entitled to fees for their duties
What is an executive director?
A director who has an employment/service contract. Has a salary.
What resolution is needed to appoint a non-executive director? And an executive director?
Non-executive - Ordinary resolution or board resolution
Executive - Board Resolution
How long after the appointment of a director must the relevant form be filed with companies house?
14 days
Can directors be personally liable for breaching their duties?
Yes, may be guilty of wrongful trading, fraudulent trading or misfeasance.
What is a Bushell v Faith clause?
A clause giving shareholder-directors weighted voting rights (e.g. two votes for every one they would normally have) on a resolution to remove them as a director.
What are the grounds to be disqualified as a director?
- Conviction of an indictable offence
- persistent breaches of company legislation
- fraud in winding-up
- summary conviction for failure to comply with companies legislation
- wrongful or fraudulent trading
- being an unfit director of an insolvent company
