Directors and Officers

Overview

The legal requirements for governance and management of a company are set out in the Companies Act 2006 and elsewhere. The Companies Act sets out the duties of company directors and the default rights of the shareholders. The form and management of a company can change as the company grows with the participation of third parties, such as investors, banks and independent advisors. The rights and duties of directors and/or shareholders contained in the articles of association may also be adjusted by shareholders agreements. As new start-ups mature and expand, specialists may be sought to contribute to growth which were not part of the original founding members.

Furthermore, if the company is to be listed a further layer of regulation is imposed on the company to protect the interests of external investors.

Procedures for appointment of company directors, termination of appointments, conduct of board meetings, and action stemming from resolutions of board meetings are usually clearly provided for in the internal governance documentation of the company. Sometimes disputes arise in respect to the proper exercise of the powers of the board and individual directors, or the correct procedures are not adhered to. For instance:

• when a breach of the articles has taken place, such as where the board purportedly exercises a power that it has no right to do so.
• directors may fall foul of their duties to the company, such as to exercise powers with reasonable skill and care, and to exercise those powers in good faith for benefit of the company as a whole.
• In the absence of shareholder approval, directors are not permitted to allow their own personal interests to supersede their duty to exercise their powers solely in the interest of the company. Instances include exercising power for an improper purpose, entering into a contract with the company where the director has a personal interest in the contract, allowing assets of the company to be transferred to him beyond limited threshold values, receiving a benefit from the company which they would not have acquired if they were not a director.

Our Services: Company Directors

Our corporate solicitors advise company directors and officers on compliance with English company law, including foreign based executives responsible for the administration of English companies. We assist directors in a variety of ways, including:

• advising on the scope of authority of the board and individual directors
• considering claims of improper conduct by directors and officers, including breach of fiduciary duties and improper exercises of corporate power;
• proper conduct and formalities of board meetings where disputes amongst the directors are likely;
• claims in respect to persons not appointed to, but with control of the board, such as de facto and shadow directors; and
• assisting in respect to wrongful conduct by individual directors and officers.

Contact us to discuss your requirements to assist company directors comply with their legal obligations.

London Business Solicitors & Lawyers

Our Solicitors in London assist businesses in the UK and internationally to create options, achieve realistic and attainable goals, and providing guidance to assist decision-making in a commercial context.

For more information, legal advice or to find out more about the legal services we provide, call 020 7353 1770 or contact us online.