Directors and Management By virtue of Section 157A directors have the power to

Directors and management by virtue of section 157a

This preview shows page 37 - 39 out of 42 pages.

Directors and Management By virtue of Section 157A, directors have the power to manage the company. The board of directors and people whom they delegate duties to are treated as agents of the company and is authorized to act on behalf of the company, which will be binding where they have the authority to do so by virtue of their actual, implied or apparent authority. 37
Image of page 37
J. - Actual authority refers to authority that an agent has expressly been conferred with. - Implied authority refers to authority an agent in a similar position would usually be conferred with, subjected to the circumstances. ( talk about the position and hence the authority that usually comes with the position. Eg. Regular employee will not have authority to issue cheques) - Apparent authority is where the company or an individual represents to another person that the agent in question has the authority to do certain acts and that other person relies on the representation. Therefore, from the facts of the case, it would appear that XXXX has _________authority to act. Therefore, the company is bound by the agreement. Director’s Duties – Absence from Board Meetings The issue here deals with the breach of a director’s duties that were conferred upon him by case law and the companies act. Although there is not express duty as laid out by case and statutory law that a director has to turn up for general meeting, failure to attend board meetings might be a breach of duty to act with due diligence if there was a complete abdication of duties. Section 157(1) of the CA stipulates that a director shall at all times use reasonable diligence in the discharge of the duties of his office. Therefore, if damages were incurred by the company as a result of the director’s abdication of duties, he could be held to have breach Section 157(1) and could be held criminally liable and liable for damages of the loss the company has suffered. However, from the facts of the case, the director seems to have been spending time ____________, and so he is less likely to be liable. Director’s Duties – Conflict of Interest Whether ________ has a claim against the directors, it is necessary to determine if the directors has breached their duties to ________ as directors. The case of Furs Ltd v Tomkies provides that directors have the duty to avoid conflicts of interest. Section 156(1) of the CA provides that a director who is in any directly/indirectly involved in a transaction has to disclose his interest of the company as soon as relevant facts come to his knowledge. Section 156(2) states that interest shall be taken to mean material interest. Section 157(1) states that a director must act honestly and use reasonable diligence in the discharge of his duties, including avoidance of conflict of interests.
Image of page 38
Image of page 39

You've reached the end of your free preview.

Want to read all 42 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture