Companies Act Essay

1179 words - 5 pages

 THE COMPANIES ACT 2001
Sub-Part D - Duties of directors
143. Duty of directors to act, in good faith and in best interests of company
(1) Subject to this section, the director of a company shall -
(a) exercise their powers in accordance with this Act and with the limits and subject to the conditions and restrictions established by the company’s constitution;
(b) obtain the authorization of a meeting of shareholders before doing any act or entering into any transaction for which the authorization or consent of a meeting of shareholders is required by this Act or by the company's constitution;
(c) exercise their powers honestly in ...view middle of the document...

(5) (a) Subject to paragraph (b), the duties imposed by this section shall be owed to the company, and not to the shareholders, debenture holders or creditors of the company.
(b) Without prejudice to any other action with regard to the same matter that is lawfully available, including an action under section 170, any member or debenture holder, as the case may be, may apply to the Court for -
(i) a declaration that an act of transaction, or proposed act or transaction, by the directors or any director or former director constitutes a breach of any of their duties under this Act;
(ii) an injunction to restrain the directors or any director or former director from doing any proposed act or transaction in breach of their duties under this Act.

Sub-Part E - Transactions involving self-interest

147. Meaning of "interested"

(1) Subject to subsection (2), a director of a company shall be interested in a transaction to which the company is a party where the director -

(a) is a party to, or shall or may derive a material financial benefit from the transaction;

(b) has a material financial interest in or with another party to the transaction;

(c) is a director, officer, or trustee of another party to, or person who shall or may derive a material financial benefit from, the transaction, Pot being a party or person that is –

(i) the company's holding company being a holding company of which the company is a wholly-owned subsidiary;
(ii) a wholly-owned subsidiary of the company; or
(iii) a wholly-owned subsidiary of a holding company of which the company is also a wholly-owned subsidiary;

(d) is the parent, child or spouse of another party to, or person who shall or may derive a material financial benefit from, the transaction; or

(e) is otherwise directly or indirectly materially interested in the transaction.

(2) A director of a company shall not be deemed to be interested in a transaction to which...

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