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Company directors
• Also known as company officers
• Can be a natural person (human) or a corporate body (i.e. another company)
• A limited company must always have at least one human director in office
• Minimum age requirement of 16
• Can also be shareholders
• Director appointments are authorised by shareholders
• Responsible for managing a company lawfully and ethically in accordance with the Companies Act 2006 and the Articles of Association
• Required to run the business within the scope of powers prescribed by the Articles
• Expected to promote the success of the business, with a view to making a profit for the benefit of the company and its shareholders
• Receive a salary (and dividend payments, if also a shareholder)
• Rights and powers are determined by shareholders
• Legally responsible for delivering annual accounts, Confirmation Statements, and Company Tax Returns by the statutory filing deadlines
• Must ensure all company taxes are paid on time
• Can be removed and disqualified if they are incompetent, display ‘unfit’ conduct, or breach their contract in any way
• Can be held personally liable and prosecuted if they fail to uphold their legal responsibilities and duties
• Normally authorised to issue and transfer shares, subject to the powers prescribed by the Articles of Association
About company shareholders
• Also known as members. The first shareholders are known as subscribers
• Can be a natural person or a corporate body
• Own some or all of a company by taking shares in the business
• Liability is limited to the nominal value of their shares. If the company gets into debt, members are only responsible for contributing the nominal value of their shares
• Can also be directors
• Receive a portion of company profits in relation to their shareholdings
• Not involved with everyday business activities or management, unless they are also directors
• Have the power to appoint and remove directors and company secretaries
• Can choose which powers and rights are granted to directors
• The proportion of ownership of the company depends on the number, value, and class of shares held
• Their voting rights, capital rights, and dividend rights depend on the Prescribed Particulars attached to their shares
• Make decisions about significant issues such as changing the company name or structure, investment opportunities, issuing shares, appointing an auditor
• Normally have a right to any surplus capital if the company is wound up
Q Can shareholder and director be the same person?
Shareholders and directors are two very distinct roles within a limited company. In simple terms, shareholders own the business, and directors run it. The interesting thing, however, is that the same person can be both a shareholder and a director
Q Can shareholders remove a director?
Section 168(1) of the Act states that the shareholders can remove a director by passing an ordinary resolution at a meeting of the company. ... The relevant shareholders must serve special notice on the company of any resolution to remove a director under the provisions of the Act.
Q Who has more power shareholder or director?
Shareholders who hold a higher percentage of the shares in the company have even more power to take other types of action. ... In simple terms therefore the more shares you have or can command then the more you can influence and disrupt the directors actions.
Q Can you be a director of a company and not a shareholder?
It is common for a founder of a company to also have the role of a director and shareholder. Even if you are not the founder of a company, you may be a director and a shareholder. Each of these roles comes with different rights and responsibilities
Q What percentage of shareholders can remove a director?
The resolution to remove the director is passed by a simple majority (i.e. anything over 50%) of those shareholders who are entitled to vote, voting in favour.
Q Can directors overrule shareholders? Can the shareholders overrule the board of directors?
If the directors have power under the company's articles to make the decision, and (as would be usual) there is nothing in the company's articles giving the shareholders power to overrule the directors, the answer is "not directly".
Q What are the grounds for removal of a director?
Some common reasons for director removal include:
• Frequently missed board meetings or committee meetings.
• Causing problems with the CEO or other executive officers by micromanaging or otherwise.
Disclosing confidential or sensitive information about the corporation to unauthorized persons.
16 авг 2021
