topic 8 Flashcards
(15 cards)
who is a director?
sec 1 def: member of board of company, as contemplated in s66, or an alternate director of company and inlcudes any person occupying the position of director or alternate director, by whatever name designated
wording of director difinition indicates?
- formalities are not crucial
- title is not important
- substance of person’s activities will determine whether they are a director
- “de facto” director (director “in fact” or “ in reality”)
alternate directors?
sec 1 def: means a person elected or appointed to serve, as occasion requires, as a member of the board of a company in substitution for a particular elected or appointed director of that company
minimum number of directors?
- private company and personal liability company = 1
- public company and NPC = 3
- MOI may require higher number of directors
- if there’s less than minimum number on board: authority of board not limited or negated and acts not invalid
not have prescribed number of directors?
any act done by board or the company will still remain valid
types of directors?
- ex officio director (director from the office)
- MOI appointed director
- alternate director
- elected director
- temporary director
appointment?
- incorporators of company are the first directors until minimum number of directors have been appointed or elected
- directors may be appointed and removed by the person named in MOI
- MOI may provide that person is ex officio director if the person is a director because of that person’s office, title, designation or status; has all the power functions and duties of any other director, unless MOI provides otherwise
- every director of profit company (excluding above) must be elected by shareholders for an indefinite term or term set out in MOI
- temp director: unless MOI provides otherwise the board of a profit company may appoint a person to fill a vacancy and act as director until filled by election (this person has all the powers, functions and duties of other directors)
election of directors?
- MOI of profit company must provide for election of at least 50% of the directors (and 50% of alternate directors)
- unless MOI provides otherwise, the voting is: a series of votes, every vote will be iro 1 indivual, vacancy filled if majority voting rights in favour of candidate and series of votes continue until all vacancies are filled
consent to act as director?
- consent must be given in writing
- company must file notice with commission within 10 business days after person becomes director (or ceases to be director)
record of directors?
- company is required to maintain record of directors and to record certain prescribed information
- access to records: shareholders/ members and other persons (sec 26(2) and (6))
disqualified?
court has descretion to permit the person to act as a director
inlegible?
no discretion and they are prohibited from acting
persons inlegible/ disqualified must not?
- be appointed or elected as director
- consent to serve as director
- act as director
ineligible?
- juristic person
- unemancipated minor/ similar legal disability
- does not satisfy requirements in MOI
- meets additional grounds of ineligibility in MOI
disqualification?
- court prohibits person to be director or declare a person delinquent
- unrehabilitated insolvent
- public regulation that person may not be director
- removed from office of trust on misconduct involving dishonesty
- convicted and imprisoned without option of fine
disqualification iro last two grounds ends on later of:
- five years after removal from office or completion of sentence or
- extension of disqualification ordered by court
