Business Law in Practice - download pdf or read online

By Paul Raby

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We also need to appreciate that although they share the name director, not all directors are the same, and we will look at the different types of director. We then look in more detail at how directors are appointed and, where necessary, removed, and the limit and extent of their powers particularly in their dealings with third parties. We will look at the concept of ultra vires and will examine directors’ liability and when this can be limited. We also look at what happens when directors are also shareholders.

Since James’s injury attendances have started to slip back to previous levels and enquiries have slowed down. After extensive, and expensive, medical treatment and opinion, it now appears that the accident may well have finished James’s career. It is being claimed that the incident occurred because of a production error at the factory of Squash Strings Ltd. An employee, Stuart Green, has approached Tim and informed him that he intends to tell the press that the production process at the factory is flawed and that Tim and the company have ignored his previous warnings.

3 What is meant by the term ultra vires? 5 The role of the board of directors The board of directors is the collective name for the directors acting together as one unit. While directors have powers as individuals (see section 7), some decisions, such as the appointment of a managing director, can only be made by the board. These decisions are made at board meetings which can be called at any time with reasonable notice. 1 Notice There is no need for notice to be in writing. What is regarded as reasonable notice will depend on the importance and urgency of the issues to be discussed and on the composition of the board.

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