Summary
Summary Director's Duties
- Course
- Institution
A document detailing director's duties.
[Show more]
Seller
Follow
richard333
Content preview
Directors' DutiesWhat is a Director
CA 2006 does not specifically define what a director is.
s250 - Director 'includes any person occupying the position of director, by whatever name calle
De jure 'in law' directors - Validly appointed.
De facto 'in fact' directors - Not validly appointed but act as directors.
'Person' - Can be natural person or another company.
Possibility of not being able to be held accountable if corporate directors are used.
Revenue and Customs Commissioners v Holland [2010].
Small Business, Enterprise and Employment Act 2015 largely abolishes corporate
person may not be appointed a director of a company unless the person is a natura
However, not currently in force, government is still seeking to determine except
Shadow Directors
Person who hasn't been officially appointed as a director may be treated as one if they are 'a pe
directions or instructions the directors of the company are accustomed to act' - s251(1).
Exception - Where that advice is given in a professional capacity.
s251(2).
Ultraframe (UK) Ltd v Fielding [2005]
Mere giving of instructions won't make a person a shadow director.
Directors must act on the instructions.
Must be shown that a “governing majority of the directors” was accustomed to acting on the
Secretary of State for Trade and Industry v Devrell [2000]
Don't need to give directions on every matter but should be shown to have a real influence
Courts will assess on a case by case basis whether particular communications amount to d
“Advice” may amount to a direction or instruction.
Shadow director doesn't in all cases have to operate “in the shadows”: depending on the fa
director to operate openly.
Not necessary for the shadow director to give instructions over the whole field of the compa
, Incorporate the company - Application to register must include statement of proposed officers: i
company's first directors.
Every private company - At least one director.
Public company - At least two directors - s154.
Afterwards - Determine via articles.
Articles silent - Vested in shareholders by passing ordinary resolution; power is vested in memb
Worcester Corsetry Ltd v Witting [1936].
Upon appointment - Director's details entered into register of directors.
s162(1) states that company must keep such register or have it kept by Companies House.
May be required to be periodically re-elected by members in order to remain in office - 'Reti
UK Corporate Governance Code 2016 - All directors should submit to re-election at reg
directors having to face re-election every year.
UK Corporate Governance Code 2018 - Provision 18; All directors should be subject to
Model articles for public companies - Require director to submit himself up for re-electio
Background
Directors subject to range of duties from different sources (Common law and statutes such as C
Act 1986, Financial Services and Markets Act 2000)
Historically - Derived from case law based on negligence and equitable duties.
Result - Law was unclear, inaccessible and out of date.
1999 Law Commission report and review of company law in 2001 - Decided to enact statutory s
s170 - 187 - Sets out business interests and responsible business behaviour.
Directors owe their duties to the company and the company only.
The only person who can sue for breach of duty is the company itself or someone who is emp
company.
Percival v Wright [1902] - Swinfey Eady J.
s170(1).
Do Not Owe Duties to:
Members - Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Ser
Creditors - Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Ser
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller richard333. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.88. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
57114 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now