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UK Company Law Shareholders and Directors - Essay Example

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The directors of a company are entitled to exercise all powers and to do all such duties and things as the company is authorized to exercise or do, except those that are required by the companies Act or done by the company in a General meeting. In enjoying their powers and duties the Directors are subject to their provision of the Act and any regulations made by the company in General meeting.
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UK Company Law Shareholders and Directors
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Download file to see previous pages If S has began to take less active part in the management of the company, she can be paid less than the agreed amount.
However, this should be done according to the laid down procedure. In her present state, she is entitled to be paid the agreed amount of money that is 30,000 Pounds. Paying her 10,000 is unjustified because in order to effect this, the directors must pass a special resolution requiring that: -
(1) In absence of any express words in the articles requiring that a director who takes a less active role in the company shall be entitled a salary three times less of his / her monthly, she is entitled for the whole pay of 30,000 pounds.
(2) In absence of any special resolution, which is passed at a general meeting o a company by a majority of 75% of members present and entitled to vote, the directive of the directors to the payroll staff to pay S 10,000 pounds is unjustified.
In this case S can challenge the decision of the directors in a court of law if they adamantly refuse to pay her 30,000 pounds, which she is entitled to be paid till the meeting is convened, and resolution passed to this effect.
First of all, the proposal has to be approved by the directions who make-up the board. The board shall decide the date and time of the general meeting and secretary will be authorized to convene the meeting. The directors will also approve the draft of notice, special resolution and explanatory statement.
Secondly, the special resolution should be passed in the general meeting held on the appointed date.
Thirdly, within thirty days of the passing of the resolution the company has to file a certified copy of the resolution. After the approval, the company should file printed copies of the articles with the registrar of companies within one month of the date of the receipt of approval.
The company Act provides that, subject to the provisions of the Act and to the conditions contained in this ...Download file to see next pagesRead More
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