Ltd Companies

Question 1

Responsibilities of the board of directors

Answer 1

Regulate the Executive
Approve plans, accounts & budgets
Select Executive, determine reward & succession planning
Mitigate risk & supervise the process of risk management
Compliance & integrity - legal, financial, results/profit warning obligations

Question 2

General duties of directors

Answer 2

Act in accordance with the company’s constitution
Promote the success of the company
Exercise independent judgement
Exercise reasonable care, skill & diligence
Avoid conflicts of interests
Duty not to accept benefits from 3rd parties
Declare a personal interest in a proposed transaction

Question 3

Memorandum & Articles of Association

Answer 3

Memorandum sets out purpose of company & regulates dealings with outsiders
Pre 01/01/09 firms - Table A
Post 01/01/09 firms - Model Articles
Articles dated, signed & witnessed
Articles of Assocation regulates internal affairs

Question 4

Articles of Association

Answer 4

Directors powers & responsibilities
Directors & Board meetings
Shares, allocation & transfer on death or illness
Profits
Shareholders & general meetings
Administration

Question 5

Rights of minority shareholders

Answer 5

Generally limited if acting alone
Two or more holding 5% or more have the right to add an item on the agenda at an AGM & right to circulate a written agreement
Right to call a shareholder meeting - 10% or more of the shares
General right not to be unfairly prejudiced such as excessive shares to major shareholders
Right under the Insolvency Act 1986 to have the company wound up