Shareholders and Directors Flashcards
Directors Duties
CAPIR
- Avoid conflict of interest in a proposed or existing transaction - s.175 CA 2006
- Not to accept personal benefits as a result of transactions, assets etc.
- Promote the success of the company
- Exercise independent judgment
- Reasonable care and skill expected of a director
Who can be a director?
16
At least 1 human
Cannot be an undischarged bankrupt
Cannot be certified by a medical practitioner as physically and mentally incapable of being a director + for at least 3 months
Remedies for minority shareholders
- Petition for unfair prejudicial conduct
- Derivative action against directors
- Winding up company
What is the theory of separation of control?
The role of the ownership of the company is separated from the role of the management of the company
Role of shareholders
Owns the company
Role of directors
Manage the day to day running of the company
Do shareholders need to declare interest in any proposed or existing transaction of the company?
No
Shadow director
A person whose directions the directors have been accustomed to act - s.251(1) CA 2006
Removal of director
- Shareholders write special notice to company - at least 28 days before GM
- Directors call GM - 14 days before GM
- GM held
Statutory Derivative claim against directors
Need permission from the court - court should take into account whether the director’s breach of duty is likely to be ratified
Directors action or omission - breach of duty
Company - claimant
Petition for unfair prejudicial conduct
Shareholder - claimant
Company’s affairs have been dealt with in a way which is unfair for the shareholder
Winding up company
Drastic remedy
Just and equitable to do so
