Home | Family | Family Law
The Act states that a director of a company must avoid any situation where they have, or may have an interest which conflicts or might conflict with the interests of the company. Although the Act does not directly define an interest, it will apply to the exploitation of property, information or opportunity, and may extend to cover benefits to friends or relatives of the director. For any director with a potential conflict of interest, the Act does provide three grounds for exemption to these provisions. Firstly, where the conflict relates to a business transaction the director can be exempted by declaring the conflict of interest to their fellow board members or shareholders. A director is also exempt if it is reasonable to consider that there is no conflict of interest to declare. Finally, a director of a company formed after 1st October 2008 can be exempt if the non-conflicted board members vote by majority to authorise the conflict of interest, providing this is not expressly prohibited in the company’s constitution. This last exemption replaced the previous law which only allowed a majority of the shareholders to authorise such a conflict. It is worth noting that for companies formed before October 1st 2008 a provision must be written into the company’s constitution to allow board approval of a conflict of interest. If your company was formed before October 1st 2008 then you should consult your company solicitor who can advise you on amending your company constitution, and offer legal advice on best practice to ensure you remain within the provisions of the Act.
Article Source: http://www.onlinearticlessite.com
If you would like to know more about company law or lawyers company please visit ContactLaw.co.uk solicitors and Lawyers.
Please Rate this Article
5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
