Q&As

Does a de jure director of a company have a general right to see legal advice obtained by the company? What if the legal advice concerns the director and may have been prepared in contemplation of bringing or defending proceedings against them?

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Produced in partnership with Peter Steel of Augury Consulting
Published on LexisPSL on 18/02/2019

The following Corporate Q&A produced in partnership with Peter Steel of Augury Consulting provides comprehensive and up to date legal information covering:

  • Does a de jure director of a company have a general right to see legal advice obtained by the company? What if the legal advice concerns the director and may have been prepared in contemplation of bringing or defending proceedings against them?

There is no general right for a director to see legal advice obtained by a company. Whether it is appropriate for the director to do so in any particular situation depends on careful consideration of the directors’ statutory and fiduciary duties and the company’s constitution.

The legal powers available to any directors are powers to act on behalf of their company. A director of a limited company is effectively an agent of the company, appointed by the shareholders to manage the company’s affairs. Generally, directors will act together as a board, but the board may also delegate certain of its powers to individual directors or to a committee of the board.

As a consequence, any powers directors may have are not independent of the company and, as a rule, a director cannot carry out any activity that the company itself cannot perform.

Directors derive their powers to act on behalf of a company from:

  1. the company’s articles of association

  2. the Companies Act 2006 (CA 2006)

  3. common law, and

  4. certain resolutions made by its members

The directors’ powers will be subject to:

  1. any limitations set out in the company’s articles

  2. CA 2006, including in particular, the directors’ general duties as set out in CA 2006 and any matters reserved to the members by CA 2006

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