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Company Directors Notes

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Core Module: CLP Paper A

Company Law - Private Limited Companies Company Directors The Directors Companies Act 2006: Part 10, Chapter 2

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Directors can be people (natural directors) or companies (corporate directors) S.155: Private company must have at least ONE director S.155: At least one director must be a NATURAL person [i.e. not a company]
S.157: Director who is natural person must be at least 16 years old Directors do not have to be shareholders - but some companies have a 'qualifying share' provision which means director must hold a certain amount of shares

REGISTERS of the Directors [CA 2006 Part 10, SS.162 - 167; Ss.240 & 246]

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The Directors Register records the details of all the company's directors

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Public Register - only holds directors' service addresses

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Restricted information - directors' residential addresses. Different types of directors

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De jure - directors validly appointed

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De facto - Re Hydrodam (Corby) Ltd 1994: A person who assumes to act as a director, is held out to be a director, who claims or purports to be a director without being validly appointed. POWERS of Directors:

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Model Article 3: Directors are responsible for management of company's business. They exercise all the powers of the company.

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They act collectively by passing resolutions at board meetings [Board Resolutions]

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Directors actions are binding on the company - they have "power to bind when acting as a board" [Re Marseilles Extension Railway]
Delegation of powers

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Model Article 5 (a) - (e)

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Further delegation is possible but only with authorisation.

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Directors can delegate to employees also - they will not be personally liable for failure by those employees (unless the director should have known that the employee was incompetent).

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Managing director can be appointed by the board and decide what powers he is to have. These powers can be varied at any time by the board.

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Committee of directors: board of directors can delegate powers to a committee. Article 6 - the committee must, as far as possible, follow the same procedures as the board.

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S.171: Directors should not act beyond their powers - "duty to act within powers" Decision making by directors [Articles: 7-16]

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