Q&As

Can the members of a company ratify the actions of the directors who, in breach of the company’s articles of association, counted towards the quorum and voted at a board meeting on a matter in which they were interested?

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Published on LexisPSL on 18/09/2018

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Can the members of a company ratify the actions of the directors who, in breach of the company’s articles of association, counted towards the quorum and voted at a board meeting on a matter in which they were interested?
  • Directors’ duties
  • Breaching the articles
  • Relieving a breach of duty
  • Ratification

Directors’ duties

Directors are the agents of a company who manage its day-to-day business and owe a number of duties to it. The Companies Act 2006 (CA 2006) codified for the first time certain common law and equitable duties that had been developed by the courts over hundreds of years and also modified company law in certain areas.

CA 2006, ss 171–177 set out the statutory duties (the general duties) owed by a director to their company, including the duty to act in accordance with the company's constitution and only exercise powers for the purposes for which they are conferred (CA 2006, s 171).

For further information on directors’ duties, see Practice Notes:

  1. Directors' duties—nature, scope, interpretation and application

  2. Directors' duties—directors' conduct: CA 2006, ss 171–174

  3. Directors' duties—directors' interests: CA 2006, ss 175–177

Breaching the articles

Where a company’s articles provide that any director who is interested in any proposed transaction with the company cannot:

  1. count towards the quorum, and

  2. vote on the matter

and, desp

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