LLB Company Law England and Wales Essay Example | Topics and Well Written Essays - 2500 words

LLB Comp whatsoever Law England and Wales - Essay ExampleAccording to the discussion the orders articles may require such authorisation from the shareholders and in such cases, even if the board authorises such transaction, it is not valid unless members approve the same. In case of public companies, only if the constitution specifically permits this, whence only the board will have authority to authorise such transactions in which a director is interested. It is to be noted that s 175 has to be interpreted in conjunction with the s 182 CA 2006. It is the latter section that deals with the scenario where a director has an interest in a present origin arrangement or transaction. For instance, if A Ltd wants to enter into business dealing with B Ltd and X is a director in both the companies This is really a conflict of interest scenario as X is the director in both the companies. If X has made an disclosure of his interest to the board of the both companies and has obtained approv al from the member of the boards, then, it is give tongue to that he has adhered with the section 175. From this paper it is clear that shareholders are authorised to take first derivative action against the directors of the federation for the detriment sustained to the company due to the conflict of interest by a director of the company. incite II of CA 2006-under s 260 - now provides an opportunity for shareholders to initiate derivative action against the company for any proposed act or any actual omission involving default, negligence, breach of trust or breach of duty. below this, as exclusion to the rule laid down in Foss v Harbottle, a statutory derivative claim can be initiated by a shareholder against the company directors, and this section does not escort the rule laid down in Foss v Harbottle but simply offers a legal agency for a derivative action. In this case, Brian can make a derivative action against the directors to reimburse the loss sustained by the compan y. Further , board has kept silent even after finding the throwback and Brain has every right to sue the directors of the company, including Marcus for their act of negligence . Issue II Duty to come along the Success of the Company Duties owed by a director of a company to the company are enumerated in S 171 to 177 of CA 2006.