Company law 2 Flashcards
(21 cards)
What is meant by authorized capital?
The maximum amount of share capital that a company is allowed to issue.
What is nominal value of a share?
The face value of a share as stated in the memorandum.
What is market value of a share?
The price at which a share is traded in the market.
What is a director?
A person appointed to manage and direct the affairs of the company.
What are the duties of directors?
They owe fiduciary duties, duty of care and skill, and statutory duties.
What is the board of directors?
A group of individuals elected to represent shareholders and oversee company activities.
What is the difference between an executive and non-executive director?
Executive directors are involved in daily operations; non-executives are not.
What is a shadow director?
A person who is not officially a director but whose instructions are followed by the actual directors.
What is a de facto director?
A person who acts as a director without being formally appointed.
What is the duty to avoid conflicts of interest?
Directors must not allow personal interests to conflict with company interests.
What is the duty to act in good faith?
Directors must act in the best interests of the company.
What is the business judgment rule?
A principle protecting directors from liability if decisions are made in good faith and with due care.
What are company meetings?
Formal gatherings of company members or directors to make decisions.
What is an annual general meeting (AGM)?
A mandatory yearly meeting of shareholders to discuss the company’s performance.
What is an extraordinary general meeting (EGM)?
A non-routine meeting to discuss urgent matters.
What is quorum in a meeting?
The minimum number of members required to conduct a meeting.
What is a resolution?
A formal decision made at a meeting.
What is an ordinary resolution?
A resolution passed by a simple majority.
What is a special resolution?
A resolution passed by a 75% majority.
When must a special resolution be used?
For major decisions like altering articles or winding up the company.
