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Summary SHAREHOLDERS AND DIRECTORS DECISIONS notes for business law
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SHAREHOLDERS AND DIRECTORS DECISIONS notes for business law and practice for the SQE 1 exams
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SHAREHOLDERS AND DIRECTORS DECISIONSDIRECTORS SHAREHOLDERS
Role Run and Manage the Provide the Money to allow the business
company to operate
Decisions These can only be made by SH:
1. Changing the articles of association
2. Changing the name of company
3. Decisions that give directors
permission to enter into certain types of
contract
4. Make the Decisions where directors
could use their position to benefit
personally from a contract
Meetings Board Meetings General Meeting
Model Articles
MA 3 Directors Run the Company
MA 9 When a director calls a board meeting
they must give notice to the other
directors
MA 11 A quorum of 2 directors must be present
at all times during a board meeting
MA 14 – can be disapplied but then A director mat not count in the quorum
s177 CA applies sameway or vote if a proposed decision of the
board is concerned with an actual or
proposed transaction or arrangement
with the company in which a director is
interested
MA 7 Board resolutions are passed by a
simple majority which means that over
half of those present must vote in favour
in order for the board resolution to be
passed.
MA 8 Directors can exercise their powers
unanimously without a meeting as long
as they indicate that they share a
common view on the matter-
Can be a resolution in writing or a text
message from each director indicating
their agreement.
MA 5 Directors can delegate their powers as
they think fit
, MA 18 A person will cease to be a director if a
bankruptcy order has been made
against them
MA 12 Director appointed to chair the board
meetings – done by passing a board
resolution
MA 13 Chair Director has a casting vote if there
is a tie
MA 39(1) Chair director will also chair general
meetings
DIRECTORS Companies Act 2006
Must have 1 director S154(1)
Public companies must have 2 directors S154(2)
At least 1 must be a natural person S155(1)
17 or older S157
1st director will take office on the
certificate of incorporation being issued
and directors appointed in accordance
with company’s articles
Directors are agents of the company
with the company being the principal
Director can be appointed to chair the MA 12
board meetings through a board
resolution
Chair Director has a casting vote at MA 13
board meeting if the original vote is a tie
Shadow director is a person in S251(1)
accordance with instructions of the
directors of the company is accustomed
to act but who is not formally appointed
as a director
Long-term service contracts for more S188
than 2 years must be approved by the
SHs by ordinary resolution
RESIGNATION- by form TM01 or TM02
which must be filled out within 14 days
of resignation
REMOVAL-
SH can remove a director by ordinary S168
resolution passed at a general meeting
Notice given prior at least 28 days
before the general meeting
Director entitled to speak at the general S169
meeting and also require the company
to send copies of any written resolution
the director wishes to make to the SHs
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