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24 Cards in this Set

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What is the difference between an Executive and Non Executive Director?

An executive D works full time with the company and mostly has a substantial personal interest.




A Non executive D spend very little working time with the company and receives a small directors fee.

Name the positions of a Director.

Officer- A director is an officer and not an employee and therefore can be found personally liable.




Agent- The director is an agent for the company and company proceedings are preformed through the director. Agency Law applies.




Quasi Trustee - A director has control of company money and property, but none of it is vested in them.

What does Section 168 say?

Director Removal Resolution. A director can be removed by ordinary resolution. 50% vote.

What reasons are needed to remove a Director?

None. A Director may use Section 994 in his defence. However, section 994 may also be avoided with clever wording in the dismissal of a director.

Why is it not advisable to remove a Director?

Because more often than not they are also Shareholder which means they will still be present in general meetings and will still have the ability to vote on decisions for the company.

What approach is normally taken for unwanted directors?

AOA alteration. Powers and voting rights can be taken away from a director through article alteration.

Which model form articles will automatically remove a Director, without a resolution?

Articles 18 and 22. CA 2006 provision prevents it, bankruptcy, illness and retirement.

Bushell v Faith

Director had weighted voting on the issue of his removal, so therefore could not be removed. Courts respect the articles of association.

Where can you find director powers?

In the AOA, service contracts and resolutions. Nothing is outlines in the CA 2006.

What powers can only be given to Shareholders?

AOA alteration and Increase/Reduction of capital.

Bamford v Bamford

The articles will prevail over a resolution. Articles will need to be changed instead, so a 75% resolution is needed.

Towcester Racecourse Co Ltd.

A director is entitled to exercise powers without interference, provided the AOA do not say otherwise.

Ashburton Oil NL v Alpha

If a director is to do something that is honestly for the best interest of the company, then they are not to be stopped because majority shareholders don't wish them to do it.

What do model form articles say about Director powers?

That directors have general powers of management.

Can shareholders prevent specific director powers?

Yes, by article alteration. (I.E special resolution). Cunninghame Case

Gramaphone Typewriter Case

Members can not hold meetings or pass resolutions to tell the Director what to do.

Lonhoro v Shell

A director reserves the right to refuse to act on members orders.

Mode Articles 3 and 4?

Article 3 - Allows the member to give power to the directors




Article 4 -Give the members the right to stop directors from preforming an action.

Grant v Switchback

Ultravires activities by a director can be ratified by special resolution.

Where will you find directors duties?

Directors duties are now codified in the CA 2006.

Corporate Opputunity Doctrine. Cook v Deeks and Bhullar v Bhullar.

Breach of fiduciary duties to avoid conflict of interest. Directors pursued business opportunities that equitably belonged to the company.

What are directors fiduciary duties?

To use the powers within the remit they where given and to avoid conflict of interest. The duties are outlined from section 171 to 176 CA 2006.

IDC v Cooley

Resignation from director position does not avoid a breach.



How will the courts measure a directors duty of care?

City Equitable Fires & Ins. Age, experience and qualifications.