Company law Analysis Paper Example

Healthy Eating Ltd is a company with two shareholders and a director called Robert and Marcia, there after Robert was now appointed managing director. The business of a company is managed by board of directors which has authority to represent the company, and in this case Robert is been appointed as managing director he controls and carry the company as well also represent the company, the articles usually provide that the directors may exercise all powers of the company which are not by statue or by the articles.

Directors act as agents of the company their acts bind the company and with few exceptions, Robert will also have a fiduciary relationship to company and must exercise their powers for the benefit to the company, the director are not employee of the company as such a director may however in addition to his directorship hold a salary employment in the company. Ferguson v Wilson (1866) LR 2 Ch App 77 in the case the plaintiff who took the case to court of chancery against a company, seeking to know the directors specific performance, to allot particular shares to him.

However, in this case the plaintiff also claimed damages in the different ways as a second alternative "if, as in this case, specific performance could not be had for the reason being that the particular shares had already been allotted to a 3rd party" Lord Cairns held the company itself cannot act in its performance it can only act through director. The same point is covered in the case of Royal British Bank v Turquandt (1856); in this case the rule says that an outsider dealing with a company need not enquire into the regularity of internal proceedings of the company.

The ostensible authority of a director to act for the company in relation to matter in which a director would normally have power to act and the ostensible authority of a director who has been held out by the company to have power to act in the particular circumstance, irrespective of any actual power. A managing director has authority to carry on the business of the company in the usual way and to do all acts and to conclude all contracts necessary for that purpose. The name and signatures of the persons authorised to sign for the company need not be notified to or deposited with the registrar of company.

A person dealing with a company need not enquire into the regularity of the internal proceeding that is into the indoor management of the company and may assume that all has been performed regularly. A director, as the company's agent, acts with apparent or ostensible authority the company will generally be bound by his acts. Consequently if a contract has been signed by a managing director or another or another person actually or ostensibly authorised by the board of directors, it will usually be binding on the company.

in favour of a person dealing with a company in good faith, any transaction decided on by the directors shall be deemed to be one which is in the capacity of company to enter into, and the power to the directors to bind the company shall be deemed to be free of any limitation under the memorandum or articles of association and a party to a transaction so decided on shall not be bound to enquire as to the capacity of the company to enter into it or as to any limitation on the power of the director, and shall be presumed to have acted in good faith, unless the contrary is proved.

Director stands in a fiduciary position to the company, and is therefore in a position of great trust, the implications of this are contained in the classic of Lord Cranworth in Aberdeen Railway Co v Blaikie bros (1854) 1 461.

''The director are the body to whom is delegated the duty of managing the general affairs of the company such agents have duties of a fiduciary nature and it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have a personal interest conflicting, or which possibly may conflict, with the interest of those whom he is bound to protect. The director must exercise their powers bona fide for the benefit of the company as a whole and must be no conflict between the director's interest and the interest of the company''

in the case of Rolled steel products Ltd v British steel corporation [1985] All ER 52, the director of steel, owned 51 per cent of the shares in the company and was also a director of Scottish steel in which he owned all the issued shares. Scotties steel owned money to BSc and steel personally guaranteed the loan, when BSc wanted additional security, caused steel to give this guarantee, even through doing so was of no benefit to rolled steel.

Both Scottish steel and Rolled steel went into liquidation. Held: although the guarantee given by Rolled Steel was not Ultra vires, BSc could not claim on the loan and BSc both knew that the contact was of no benefit to Rolled steel and that it had therefore been given for an improper purpose, why in all this state's Robert as a director must exercise their powers for the benefit of the company as a whole and must be no conflict between the director's interest and the interest of the company.

Robert owes a duty of care and skill to the company; the general standard expected being that reasonable man looking after his own affairs. There are three propositions which are outlined to director of their duty of care and skill they own to a company. First director always need to show the level and amount of care and skill which would be expected from someone with their own personal level of knowledge and experience, also director is not expected to give continuous attention to the company's affairs.

Third, a director is entitled to trust that an official to whom duties have been delegated is exercising those duties properly. Directors should have regard to the interests of the company's employee as well as to the interest of the member, if there is any problem with the interest of the company with the interest of the employees the director has no chose to put the company first at all time Robert as to be carefully when dealing with problems which involves employees, never the less the company comes first in his own duty.

The local authority decided to extend the public park, the land owned by Estate Ltd, the local authority offered compensation only for the value of the land, the buildings and loss of profit suffered by Estate Ltd. Compulsory purchase powers are, as the term relates, to the authority and supremacy for the local government such as councils or other public sectors to purchase and the acquisition of any property, without any restraint of consent, which is deemed to be the main source and pillar to the development of territory resources which would gain the local community directly or on a national level.

Hence compulsory purchase powers are alleged and classified as a very crucial instrument exercised by local authorities or public sector in the measurement, selection and process of appropriate resources congregation for the allocation on the social and economical change basis.

Consequently attributed bodies with compulsory purchase power are however expected to base their potential purchase projects with the Acquisition of Land Act 1981 where the enclosed guidelines and key elements will offer guidance for aims and gains, also with statutory or administrative requirements in relation to processes and procedures before the implementation of any action-plan.

With appropriate logical investment scheme set up and rational utilisation of resources, objectives will be achieved with optimum gains which would therefore result in the effectiveness and efficiency of urban renaissance, communities' renewal and the development and promotion of business opportunities thus affecting and improving quality of life and standard of living of the community on a local or national level.