What does MA 9 specify about how to call a board meeting?
Who has to be there per MA 11?
doesn’t have to be by writing
must include time date and place
must be reasonable, dependent on the company size for example
2 directors - quorate
Although a 2 year+ service contract requires ordinary resolution to pass, when might it not?
If the contract can be ended if there are two years’ NOTICE or less, it doesn’t require approval, regardless of the total length
When voting on a potential director service contract, what must be circulated or available prior to the meeting?
Memorandum of the proposed service contract must be available at the registered office for 15 days before the meeting and at the meeting itself, or circulated with a written resolution
Removing a director - ordinary resolution
What is special notice prior to a general meeting?
The company must be given at least 28 days’ notice before the meeting
If simultaneous notice isn’t possible, shareholders must be informed at least 14 days before the meeting via newspaper or other approved method
What are the 8 notable duties of a director?
CA 2006
- Act within powers - 171
- Promote success of company - 172
- Exercise independent judgement - 173
- Reasonable care, skill and diligence - 174
- Avoid conflicts of interest - 175
- Not to accept benefits from third parties - 176
- Declare interest in proposed transactions/arrangements - 177
- Declare interest in pre-existing transactions/arrangements - 182
Duties of directors
When might a director not have to exercise the duty of acting with independent judgement?
a. In accordance with a duly entered agreement
b. Authorised by company constitution
Duties of directors
When exercising the duty of avoiding conflicts of interest, what considerations are made?
This only applies to transactions not yet entered into
No breach if matter authorised by directors - board resolution agreeing to the breach is good enough
Duties of directors
When exercising the duty of declaring an interest in proposed transactions, what considerations are made?
This only applies to transactions already being entered into, not just merely considering
Director doesn’t have to declare if it’s about their own service contract
They can’t disapply the fact that the director can’t vote in these if they’re also a shareholder
How could shareholders ratify a breach of duty by a director?
Ordinary resolution
A director who is also a shareholder cannot vote in this
When declaring an interest in a pre-existing transaction, what are some notable considerations?
Criminally punishable
Notice must be made at a meeting of the directors, or in writing sent to all directors, or at a board meeting
What three claims could be brought against a director during insolvency?
Wrongful trading
Fraudulent trading
Misfeasance
What is a substantial property transaction?
A director, in their personal capacity, or someone connected with a director:
a. buys from or sells to the company
b. a non-cash asset
c. of substantial value
SPT
What is a connected person?
Director’s family members
Companies where the director, or people connected to the director (or together), either:
- Own at least 20% of the company’s shares, or
- Can exercise or control more than 20% of the voting power at a company meeting
SPT
What is substantial?
Will automatically be classed at substantial if its value is over £100,000
OR
It is worth more than £5,000 and more than 10% of the company’s net asset value.
What if a company is making a loan to a director?
Shareholders need an ordinary resolution, unless an exception applies
This includes if the director is also director of a holding company
What are the exceptions to needing an ordinary resolution to approve a loan for a director?
Company purposes up to 50k
For defending civil, criminal and regulation proceedings against company
Minor business transacs. up to 10k
Loss of office
Payments to directors exceeding £200 that they aren’t legally entitled to require…
An ordinary resolution
This includes payments to past directors!
What is the min and max time a director can be disqualified for?
2 years
15 years
What is a de facto director?
Acts as director but never been appointed
What is a shadow director?
Isn’t officially appointed but whose directions the company’s directors usually follow (e.g. a major shareholder, lender, or consultant)
