To act within powers (s171)

Director must act within the company’s constitution • Exercise powers only for the reason they were conferred • Exercising powers for other reasons will make the transaction invalid unless ratified by the company in general meeting

To promote the success of the company (s172)

In good faith, most likely to promote the success of the company, for the benefit of its members as a whole • Take into consideration: • Long term consequences • Interests of employees • Foster business relationships • Impact on community

To exercise independent judgement (s173)

Particularly important if a subsidiary • Not in breach if act in a way authorised by constitution • Not in breach if enter into agreement that restricts future exercise of discretion by directors, if in the best interests at the time

To exercise reasonable care, skill and diligence (s174)

Exercised by a reasonably diligent person with • General knowledge, skill and experience of person performing their functions (objective test) • Actual knowledge, skill and experience (subjective test)

To avoid conflict of interest (s175)

• Avoid a situation which has or can have a direct or indirect interest that conflicts or may conflict with the interests of the company or another duty • Particularly applicable to the exploitation of property, information or opportunity

Not to accept benefits from third parties (s176)

• Must not accept a benefit from a third party by reason of their: • Being a directors • Doing (or not doing) anything as a director

To declare interest in proposed transaction or arrangement (s177)

Director must declare the nature and extent of such interest to the other directors • Notice can be made: • At a board meeting • By notice in writing • By general notice • Provided declaration is made, no need for approval by

Help

Options

focusNode

Didn't know it?
click below

Knew it?
click below

Don't Know

Remaining cards (0)

Know

retry

shuffle

restart

0:00

Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

Normal Size Small Size show me how

company law

Question	Answer
To act within powers (s171)	Director must act within the company’s constitution • Exercise powers only for the reason they were conferred • Exercising powers for other reasons will make the transaction invalid unless ratified by the company in general meeting
To promote the success of the company (s172)	In good faith, most likely to promote the success of the company, for the benefit of its members as a whole • Take into consideration: • Long term consequences • Interests of employees • Foster business relationships • Impact on community
To exercise independent judgement (s173)	Particularly important if a subsidiary • Not in breach if act in a way authorised by constitution • Not in breach if enter into agreement that restricts future exercise of discretion by directors, if in the best interests at the time
To exercise reasonable care, skill and diligence (s174)	Exercised by a reasonably diligent person with • General knowledge, skill and experience of person performing their functions (objective test) • Actual knowledge, skill and experience (subjective test)
To avoid conflict of interest (s175)	• Avoid a situation which has or can have a direct or indirect interest that conflicts or may conflict with the interests of the company or another duty • Particularly applicable to the exploitation of property, information or opportunity
Not to accept benefits from third parties (s176)	• Must not accept a benefit from a third party by reason of their: • Being a directors • Doing (or not doing) anything as a director
To declare interest in proposed transaction or arrangement (s177)	Director must declare the nature and extent of such interest to the other directors • Notice can be made: • At a board meeting • By notice in writing • By general notice • Provided declaration is made, no need for approval by

Created by: TDuck

"Know" box contains:
Time elapsed:
Retries: