Consent in advance and Ratification

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  • Created by: mellon
  • Created on: 28-04-14 19:16
What do shareholders need to give consent for?
Conflicts of interest or secret profits
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What happens if the shareholders approve?
The act will not be set aside s180
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Can directors authorise a conflicts of interest disclosure?
Yes, if allowed to do so by articles of association, but director with conflict cannot vote
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What happens if the director fails to disclose under s177?
s178 civil remedies. Then can disclose after act s182. If director fails again, criminal liability
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How can acts be ratified after the act?
By shareholder resolution. Director and connected shareholders can't vote s239
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What can be ratified?
Directors negligence, breach of duty or trust
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In what period does ratification need to happen?
s190 within a reasonable period
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How else can a directors act be ratified?
By the court s1157
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When will the court ratify or excuse an act?
When the director is honest and reasonable and the court ought to do so. eg in D'jan director was partially excused.
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Can the articles excuse a director's act?
Nooooooo
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What is the general rule about loans between the company and directors?
There is a general prohibition except where there is shareholder approval
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Can loans be ratified?
Yes, so s214
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Are there exceptions?
Yes under s204-209. If the loan is spent on the company's business, minor or business transactions or defending legal proceedings
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What is the remedy for an unapproved loan?
Avoidance, unless restitutio, 3rd party rights would be harmed or company is indemnifed
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What happens if the approval is not minuted?
Royal Hastings says then the director is still liable
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Other cards in this set

Card 2

Front

What happens if the shareholders approve?

Back

The act will not be set aside s180

Card 3

Front

Can directors authorise a conflicts of interest disclosure?

Back

Preview of the front of card 3

Card 4

Front

What happens if the director fails to disclose under s177?

Back

Preview of the front of card 4

Card 5

Front

How can acts be ratified after the act?

Back

Preview of the front of card 5
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