Company Officers & Decision-Making
Officers of the Company
Members.
Every company at least one member (Companies Act s7(1)) - Majority have more.
'Members' and 'shareholders' used interchangeably.
Member is a shareholder and vice versa.
Legislation uses the word 'member' instead - CA 2006 also governs companies withou
shareholders.
'Shareholders' are the owners of the company, but general power to 'manage' company is
company's articles of association.
Directors.
Members - Usually no authority to represent company externally.
Appoint directors to manage business and represent company.
Directors enter into contracts, legal relationships, commence legal proceedings, hire emplo
Directors also members of a company.
Company where all the members are directors - Owner-managed company.
s154 CA - At least one director.
Public company must have two - Companies as artificial legal entities cannot act themselve
Make decisions on behalf of company.
s155 CA - Must have at least one director who is a natural person.
Companies themselves can act as directors within other companies - Rare in practice.
Small Business, Enterprise and Employment Act 2015 will abolish by inserting a new s
directors may not be appointed unless natural person.
Not in force at the moment.
Must be over 16-years-old.
s250 CA - Definition of director vague.
Any person occupying position of director by whatever name.
Not based on title - On the role they play in relation to company and to decision-making
s251(1) CA - Shadow director: "a person in accordance with whose directions or instruction
are accustomed to act".
Cases
, Not necessary for the shadow director to give instructions over the whole field o
Eligibility limitations - Cannot become directors.
Under the age of 16 – s157 CA 2006
Company’s auditor cannot act as its director – s1214 CA 2006
Person who is disqualified (and therefore cannot act as a director anymore) – s1 Comp
Act 1986
Undischarged bankrupt cannot act as a director – s11 Company Directors Disqualificati
Appointment process
Application to register must include proposed officers - Identify who will be first director
Also provided in IN01 form.
Thereafter - Appointing is a matter for companies themselves to determine via articles
Model articles - By ordinary resolution or decision of directors (Model Articles, article 17
Upon appointment, director's details should be entered into register of directors.
s162(1) CA - Every company must keep register.
Private companies can opt to keep that information on register maintained by Compani
Removing directors
s168 CA - Can use ordinary resolution at meeting to remove director before expiration
Several procedural rules must be complied with:
Must be passed at general meeting so written resolutions cannot be used - s288(2)
Special notice (28 days) needs to be given for resolution and company must send c
s312(1), 168(2), 169(1).
Directors have right to be heard at general meeting - s169(2).
Secretary.
Considered officers of company - s1121(2) - but not directors.
Possible for director to also act as company secretary.
Appointment of secretaries.
May appoint company secretary but not obliged to do so - s270(1) - unless articles of a
must be appointed.
Must keep register of secretaries although private company can keep details on public
s274A, 279A-279E.
Role of secretaries - Not defined in legislation but mostly responsible for smooth administra
Officers of the Company
Members.
Every company at least one member (Companies Act s7(1)) - Majority have more.
'Members' and 'shareholders' used interchangeably.
Member is a shareholder and vice versa.
Legislation uses the word 'member' instead - CA 2006 also governs companies withou
shareholders.
'Shareholders' are the owners of the company, but general power to 'manage' company is
company's articles of association.
Directors.
Members - Usually no authority to represent company externally.
Appoint directors to manage business and represent company.
Directors enter into contracts, legal relationships, commence legal proceedings, hire emplo
Directors also members of a company.
Company where all the members are directors - Owner-managed company.
s154 CA - At least one director.
Public company must have two - Companies as artificial legal entities cannot act themselve
Make decisions on behalf of company.
s155 CA - Must have at least one director who is a natural person.
Companies themselves can act as directors within other companies - Rare in practice.
Small Business, Enterprise and Employment Act 2015 will abolish by inserting a new s
directors may not be appointed unless natural person.
Not in force at the moment.
Must be over 16-years-old.
s250 CA - Definition of director vague.
Any person occupying position of director by whatever name.
Not based on title - On the role they play in relation to company and to decision-making
s251(1) CA - Shadow director: "a person in accordance with whose directions or instruction
are accustomed to act".
Cases
, Not necessary for the shadow director to give instructions over the whole field o
Eligibility limitations - Cannot become directors.
Under the age of 16 – s157 CA 2006
Company’s auditor cannot act as its director – s1214 CA 2006
Person who is disqualified (and therefore cannot act as a director anymore) – s1 Comp
Act 1986
Undischarged bankrupt cannot act as a director – s11 Company Directors Disqualificati
Appointment process
Application to register must include proposed officers - Identify who will be first director
Also provided in IN01 form.
Thereafter - Appointing is a matter for companies themselves to determine via articles
Model articles - By ordinary resolution or decision of directors (Model Articles, article 17
Upon appointment, director's details should be entered into register of directors.
s162(1) CA - Every company must keep register.
Private companies can opt to keep that information on register maintained by Compani
Removing directors
s168 CA - Can use ordinary resolution at meeting to remove director before expiration
Several procedural rules must be complied with:
Must be passed at general meeting so written resolutions cannot be used - s288(2)
Special notice (28 days) needs to be given for resolution and company must send c
s312(1), 168(2), 169(1).
Directors have right to be heard at general meeting - s169(2).
Secretary.
Considered officers of company - s1121(2) - but not directors.
Possible for director to also act as company secretary.
Appointment of secretaries.
May appoint company secretary but not obliged to do so - s270(1) - unless articles of a
must be appointed.
Must keep register of secretaries although private company can keep details on public
s274A, 279A-279E.
Role of secretaries - Not defined in legislation but mostly responsible for smooth administra
