Shareholders and Directors There is considerable flexibility as to the relationship between the board of directors, the management, the shareholders and the company, which may be provided. There may or may not be a partial or complete overlap of personnel. The company’s powers are delegated to the directors by the shareholders under default provisions/ standard articles of association. The provisions […]
Status as Director The questions of whether or not a person stands appointed as a director or whether he has ceased to be a director are determined by ordinary principles of company law and contract law. The appointment of a director is effected by the members or in some cases, by the board of directors. The director must consent to his appointment […]
Ineligibility for Appointment The purported appointment of a director without his consent is void. A body corporate or unincorporated body of persons may not act as a director. Any such appointment is void. Persons under 18 years of age may not be appointed a director. Any purported appointment is void. An undischarged bankrupt may not act as a director or […]
Directors’ Duties Directors have significant responsibilities and duties. Appointment as a director should not be undertaken lightly. Directors can be held liable where they act as mere nominees or simply sign documentation put before. It is not generally an excuse that a director relies on a fellow directors’ good faith. Because the directors control the company, they are in a […]
Codified Directors’ Duties The Companies Act 2014 consolidated and restated the law in relation to directors’ duties. It sets out certain directors’ duties in statutory form, for the first time. This follows the approach of the Companies Act, 2006 in the United Kingdom. The duties are confirmed as being owed to the company and the company alone. The Companies Act […]
Statutory Duties of Directors I The statutory duties of directors are set out in the Companies Act, 2014. This statement of their obligations is without prejudice to any legislation, including the Companies Act. The statutory duties may be enforced in the same way as any other fiduciary duty owed to a company by its directors. The statutory duties are specifically […]
Contracting and Holding Office A director of a company is not disqualified by reason of his office, from contracting with the company in relation to his terms of employment, the terms on which he holds office, as a vendor, purchaser or otherwise. A contract by the company in relation to such matters, in which the director is interested, is not […]
Office of Director Directors may have a wide variety of roles in the company, in addition to the exercise of the office or function of a director. They frequently hold key executive positions. An executive director is a full-time working director who may or may not be a shareholder. A directorship as such is not a paid office. There is […]
Overview I Directors have obligations to disclose certain interests and dealings in the shares of the company, held by them and by connected parties and family members. The obligation applies both to shares and debentures in the company. For convenience, the expression “shares” is used below. The obligation extends shares in the company’s subsidiaries and holding company (group companies). It extends to option […]
Overview The powers of the board of directors are set out in the default Companies Act provisions/ articles of association. The default provisions/ articles vest the powers of the company in the board of directors, other than those specifically reserved to the shareholders. The directors can exercise their powers in accordance with the constitution/ memorandum and articles of association and […]
Compliance Statement Requirement. The Companies (Auditing and Accounting) Act, 2003 provided for directors’ compliance statements. The directors’ compliance statements required under the 2014 Act, are in more modest form than had previously been provided for under the 2003 legislation, which was not commenced due to significant opposition on cost and efficiency grounds. The 2014 Act provides for directors’ compliance statements and other specific […]
Status of Director Under the default Companies Act provisions and standard articles, a director may resign by notice in writing to the company.The question of what constitutes resignation is one of fact. The resignation may also terminate employment or a service contract with the company. The termination of office may raise separate issues under the terms of the director’s contract with the […]
Dealings in Company’s Assets Certain acquisitions, transactions and transfers between directors and the company must be approved by the shareholders in general meeting or by written resolution. The requirement applies where the company acquires certain non-cash assets from a director, or a director acquires certain non-cash assets from the company. Similarly, transactions with persons connected with the company’s director must […]
Registered Office An Irish registered company must have a registered office in the Republic of Ireland. Details of the registered office and every subsequent change of the office must be notified to the CRO. It is an offence to fail to register the change. The change must be registered within 14 days. The registered office may be stated to be […]
Records of Loans The Companies Act 2014 requires that loans and credit transactions between the company and directors must be evidenced in writing, in order to be enforceable. The requirement applies to loans by directors to companies and loans by companies to directors. There are presumptions in each case, which are against the interests of the director and in the interests of […]
Background I Loans to director and guarantees and charges for their benefit are prohibited, with exceptions which may be available subject to conditions. The prohibition extends to loans, guarantees and charges granted to directors and to persons connected to directors. It also applies to loans etc., by the company’s holding company. The statutory restrictions are in addition to restrictions that might […]
Overview of Exemptions I Loans, guarantees and security granted by a company to or for the benefit of a director or a to person or company connected to him, are very strictly regulated. Generally, such loans, guarantees and security are prohibited and are void. They also constitute a criminal offence. There are various exceptions to the general prohibition. Some exemptions apply only […]
Company Secretary Every company, including a single member company, must have a secretary. The secretary may also be a director. This is typically the case with small-scale private companies. A director can be both director and secretary. However, where company law requires a director and secretary to do things separately, it cannot be done by the same person in both […]