BLAW211: Division of Powers
Powers of Directors & Shareholders prior to 1993 Act
-Powers kept separate, decisions made by D or S is the final decision, company to be managed by human agents, Articles of Association defined powers
Management Power, s128
Business and affairs to be managed by, or under the direction or supervision of, the board of the company. Board has all the powers necessary to manage and bind the company
Directors and outside parties
- Directors have power to bind company in transactions with outside parties
- Subject to s18 (don't oppose someone dealing with company to set aside transaction)
Delegation of Directors Powers
- cannot delegate primary powers including;
- name change of company
- issuing shares, distribution or transfer of shares
- change of registered office and address for service
Ability to Delegate Powers, s130
- Subject to any restricitions in the constitution of the company, the board of a company may delegate to a committee of directors, a director or employee of the company, or any other person, any 1 or more of its powers other than its powers under any of the sections of this Act
Shareholders: Management Review, s109
Chairperson of a meeting of Sh of a company must allow a resonable opportunity for Sh at the meeting to question, discuss, or comment on the management of the company
Major Transaction, s129
Company must not enter into a MT unless approved by special resolution or contingent on approval by SR.
See document
Unanimous Assent, s107
- Only if all entitled people agree (SH or anyone who constitution confers the rights of a SH)
- Procedures regarding distribution, issues of shares, share buyback can be avoided with UA. If ONE SH changes mind, s107 not valid.
The Constitution
- Passed by the shareholders
- Adoptions and alterations require special resolution (75%)
- Not compulsory to have one
Entrenched Provisions
- some provisions in the Act are entrenched
- must have one shareholder, one director and a name
- s133: directors must exercise their powers for a proper purpose
- must pass solvency test before making a distribution s52
Authorising Provisions
- some actions only allowed if authorised in Constitution
- s59: share buyback
- s68: issuing redeemable shares
Pre-Emptive Rights, s45
- new shares are issued, they must first be offered to existing shareholders
- company is allowed to negate, modify or limit these requirements
Procedure to Adopt a Constitution
- Through registration
- At any other time by special resolution of shareholders
Types of Constitution
- Long Form: all rules layed out
- Short Form: modifies certain provisions
- No Constitution