Topic_6_-_Directors_Duties_Part_2_.pdf

Topic_6_-_Directors_Duties_Part_2_.pdf - Topic 6 Directors...

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Topic 6 - Directors Duties (Part 2) 1 UKML 2013 Company Law Topic 6 Directors – Part 2 Bachelor of Accounting (Hons) Contracts with Company, Restricted Dealings Page References to Dr Chan WM’s book Officers, directors, managers Types of Directors Who qualifies to be a Director? Appointment of a Director Termination of a Director Directors’ Remuneration Directors’ Powers Proceedings of the BOD Directors’ Duties Contracts with company Restricted Dealings Protection of Officers Other textbooks Pg 219-224 Pg 225-226 Pg 226-232 Pg 232-237 Pg 242-244 Pg 273-275 Pg 244-253 Pg 253-256 Pg 256-273 Pg 275 2
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Topic 6 - Directors Duties (Part 2) 2 Contracts with Company Section 221 – Disclosure of Interest in contracts, proposed contracts, property, offices, etc. Section 222 – Interested director not to participate or vote Section 234 – Contract with sole member who is also a director 3 Restricted Dealings Section 228 – Substantial value property transaction involving directors, substantial shareholder or a person connected to director/substantial shareholder Section 223 – Substantial value property transaction not involving directors (unrelated individuals or companies) Section 224 – Loans to Director Section 225 – Loans to Person Connected to Director 4
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Topic 6 - Directors Duties (Part 2) 3 Section 221 – Disclosure of interest in contracts, properties and office S. 221(1)&(6) - Director must declare his interest when: he is directly or indirectly interested in a contract / proposed contract with Co he holds any office or possess any property which may directly or indirectly create a conflict with his duties. Disclosure to be made by Director in these situations Interested in Hold Possess Contract or Office Property Proposed (conflicting) (conflicting) Contract 5 Examples related to s.221 Luke has a hardware business in Subang Jaya. He joins Syarikat Star Wars S/B as Director. Now Star Wars negotiates to buy over the hardware business = Luke is directly or indirectly interested in a proposed contract with Co Finn is Chairman of Kelab Empire , which often rents premises belonging to Syarikat Jumanji Bhd . Finn joins Jumanji Bhd as a director = Finn holds any office which may directly/indirectly create a conflict with his duties. Rose has a piece of land in Sg Buloh. Syarikat Jumanji Bhd plans to buy land in Sg Buloh. Rose joins Jumanji Bhd as a director = she possess any property which may directly/indirectly create a conflict with her duties. 6
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Topic 6 - Directors Duties (Part 2) 4 Section 221 – Disclosure of interest in contracts, properties and office S.221(2) & (3) – When Director needs not disclose or when he is not deemed to be interested (not have interest): where he is a member/creditor of another Co. Unless it is a material interest (e.g. more than 5%) where contract relates to a loan given to Co, Director is only a guarantor Director of related Co’s is not considered interested in contracts between the Co’s.
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  • Winter '15
  • Corporation, Types of companies, Subsidiary

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