9. Duty to act within constitution and powers

2021 ◽  
pp. 153-176
Author(s):  
Brenda Hannigan
Keyword(s):  
Third Parties ◽  
Abuse Of Power ◽  
Important Constraint ◽  
Statutory Protection ◽  
A Company

The Companies Act 2006 (CA 2006) requires directors: to act in accordance with the constitution (defined s 257) and to exercise powers for the purposes for which they are conferred. This chapter focuses on s 171. The discussion covers the constitutional division of power within a company, types of authority, statutory protection of third parties, and exercise of a power for an improper purpose. Much of the discussion is of the important agency rules which govern directors’ authority, considering in particular the extent to which third parties can rely on the apparent or ostensible authority of an individual director or directors. The circumstances in which third parties are put on inquiry are considered. The statutory protection afforded to third parties by CA 2006, s 40 is also examined. The proper purpose doctrine is an important constraint on abuse of power by directors and the application of the doctrine is addressed in detail.

9. Duty to act within constitution and powers

Company Law ◽  
2018 ◽  
Author(s):  
Brenda Hannigan
Keyword(s):  
Third Parties ◽  
Statutory Protection ◽  
Bona Fide ◽  
A Company ◽  
Degree Of Overlap

Directors have a duty to act bona fide in the interests of the company and exercise their powers for a proper purpose and not for any collateral (i.e. personal or sectional) purpose. The Companies Act 2006 (CA 2006) splits that duty into distinct obligations: to act in accordance with the constitution (defined s. 257 and see 5-8), to exercise powers for the purposes for which they are conferred in s. 171, and to act to promote the success of the company in s. 172. This demarcation clarifies the elements of these obligations, but there remains a degree of overlap between them. This chapter focuses on s. 171. The discussions cover the constitutional division of power within a company; types of authority; statutory protection for third parties; and exercise of a power for an improper purpose.

Corporate Personality

2021 ◽  
pp. 37-47
Author(s):  
Eva Micheler
Keyword(s):  
Third Parties ◽  
Company Law ◽  
Organizational Boundaries ◽  
Legal Personality ◽  
Corporate Form ◽  
Organizational Action ◽  
To Come ◽  
A Company ◽  
Corporate Personality

This chapter discusses how separate legal personality can be explained as a solution developed by company law to address the problem that organizations are social rather than brute facts. For a company to come into existence, certain documents need to be registered. These contain information that facilitates the interaction between the company and third parties. Registration as a company then gives an organization a public legal manifestation. The Companies Act does not limit the corporate form to organizational action. The corporate form can therefore be used for other purposes and organizational boundaries do not align with legal personality. But this does not undermine the observation that company law is designed for the operation of organizations.

scholarly journals Practical Aspects Regarding the Dissolution of a Company by Declaring the Company Null and Void

2020 ◽  
Vol 14 (1) ◽  
pp. 1211-1216
Author(s):  
Andreea Stoican
Keyword(s):  
Traditional Approach ◽  
Third Parties ◽  
Point Of View ◽  
Legal Requirements ◽  
Current Form ◽  
Practical Point ◽  
Initial Form ◽  
The Law ◽  
A Company

AbstractLaw no. 31/1990 on companies, in its initial form, developed a more traditional approach of the consequences of the non-compliance with the legal requirements for the establishment of a company. Though, in the mentioned version, the interest of protecting third parties prevailed, with the exclusion of the drastic sanction of nullity. However, the legislator, in time, reached the conclusion that a more modern approached needed to be taken into consideration, which should reach a balance between the need to protect the interests of third parties and the imperative to comply with the law with reference to the conditions that must be met to establish a company. Even so, in this current form of the regulation, a concern still remains, respectively that of trying to save the company, to bring it to fulfill the conditions of legality and, through this, to protect third parties also. But in some cases it is necessary for the company to cease to exist by declaring its nullity. Therefore, the current study aims in presenting and analyzing, from a more practical point of view, the occurrence of the nullity of a company and the consequences of such a measure both for the company itself and also for its partners.

scholarly journals PENCATATAN PERUBAHAN DIREKSI DI KEMENTERIAN TERKAIT SEBAGAI DASAR PENYELESAIAN SENGKETA KEWENANGAN DIREKSI

2020 ◽  
Vol 28 (3) ◽  
pp. 369
Author(s):  
Maleakhi W. Sitompul
Keyword(s):  
Human Rights ◽  
Board Of Directors ◽  
Limited Liability ◽  
Third Parties ◽  
Limited Liability Company ◽  
Legal Provisions ◽  
Starting Point ◽  
The Board Of Directors ◽  
The Right ◽  
A Company

Research on the recording of changes to directors in the relevant Ministry, namely the Ministry of Law and Human Rights, aims to examine whether the authorized Directors in a company are Directors registered at the Ministry of Law and Human Rights. In addition, it is also to examine whether the provisions of Law no. 40 of 2007 concerning Limited Liability Companies and / or the Company's Articles of Association is sufficient to resolve disputes of authority in the event of a dispute regarding the composition and number of directors in a company, which one has the right to act against other parties. Disputes regarding the composition and authority of the Board of Directors in a limited liability company often become disputes in court, even though Indonesia's positive legal provisions have provided clear and firm rules about who the Board of Directors can represent in and out of court. Based on research, it can be seen that the starting point is from the provisions in Law No. 40 of 2007 Articles 29 and 98, changes in the members of the board of directors can only be effective for third parties, as from the date the changes are recorded in the Company Register by the Minister of Law and Human Rights in accordance with Law No. 40 of 2007 Articles 29 and 98.

Liabilities of Directors To Third Parties

2017 ◽  
Author(s):  
Lexa Hilliard
Keyword(s):  
Limited Liability ◽  
Third Parties ◽  
Corporate Form ◽  
A Company ◽  
Personal Liability

A principal purpose of incorporating a company with limited liability is to avoid the personal liability that otherwise attaches to an individual if he trades without the protection of the corporate form. Incorporation with limited liability undoubtedly shields a director from the routine liabilities associated with carrying on business when that business is carried on by a company rather than by him as an individual. Legally, the business is then the company’s business, not the director’s business and therefore any contracts concluded or obligations undertaken in relation to the business are, ordinarily, contracts or obligations of the company.

scholarly journals L'abus de pouvoir des représentants légaux dans le droit familial du Québec

2005 ◽  
Vol 19 (1) ◽  
pp. 117-133
Author(s):  
Germain Brière
Keyword(s):  
Married Woman ◽  
Family Law ◽  
Third Parties ◽  
Legal Representative ◽  
Legal Representation ◽  
Abuse Of Power ◽  
The Third ◽  
Absence Of Power ◽  
The Relationship ◽  
Legal Mandate

In order to determine the nature of the abuse of power of the legal representatives in Quebec family law, one must identify the different cases of legal representation and study the powers of the different representatives. Tutorship is the mechanism for the protection of the non emancipated minor. As a rule, the tutor represents his pupil in civil acts; but in some cases he has no power to act, in other cases he must get the judge's authorization, while in a third category of cases he must comply with special formalities. Consequently, there can be absence of power, misappropriation of power, bad utilization of power or dereliction of duty. Curatorship is used for different kinds of interdicted persons. The powers and liabilities of the curator to an interdicted person are generally the same as those of the tutor. The legal mandate of the married woman is the power to represent her husband for the current needs of the household and the maintenance of the children. In this case, the abuse mainly takes the form of an excess of power. The effects of the abuse of power must primarily be considered in the relations between the represented person and his legal representative; we must ask ourselves if the legal representative is liable for damages, if his acts can be annulled and if there can be withdrawal from office. There are also effects to be considered in the relationship between the legal representative and the third persons, as well as in the relationship between the represented person and the third parties.

scholarly journals PENGARUH COST OF BORROWING, PROFITABILITY DAN COLLATERAL VALUE OF ASSETS TERHADAP STRUKTUR MODAL PADA PERUSAHAAN REAL ESTATE DI INDONESIA

2018 ◽  
Vol 13 (1) ◽  
pp. 11-28
Author(s):  
Ade Suryana
Keyword(s):  
Real Estate ◽  
Capital Structure ◽  
Significant Influence ◽  
Stock Exchange ◽  
Investment Decision ◽  
Third Parties ◽  
Net Income ◽  
Public Company ◽  
Depth Analysis ◽  
A Company

Genarlli, the main goal of a company is to maximize its shareholders’ wealth. For a public company, it means maximizing return to its outstanding shares. The final decisions made by the management, which comprise of investment decision and financing decision. Real estate industry is a capital-intensive industry that would spend large fund to start the operations. Consequently, most real estate companies would search and rely upon loan from third parties as its main financing source other than its own capital.The objective of this research is to reveal whether there is influence of cost of borrowing, profitability, and collateral value of assets on capital structure.Th hypothesis for this research are: (a) to reveal whether there is influence of cost of borrowing on capital structure in real estate companies in Indonesia, (b) to reveal whether there is influence of profitability on capital structure in real estate companies in Indonesia, (c) to reveal whether there is influence of collateral value of assets on capital structure in real estate companies in Indonesia, and (d) to reveal whether there is influence of cost of borrowing, profitability and collateral value of assets, simultaneously, on capital structure in real estate companies in Indonesia.Using multiple linear regressions to test those hypotheses, the data obtained from real estate companies listed in Indonesia Stock Exchange during 2003-2007 revealed that: (a) there is negative and significant influence of cost of borrowing on capital structure in real estate companies in Indonesia, (b) there is positive and significant influence of profitability on capital structure in real estate companies in Indonesia, (c) there is positive and significant influence of collateral value of assets on capital structure in real estate companies in Indonesia, and (d) there is  significant influence of cost of borrowing, profitability and collateral value of assets, simultaneously, on capital structure in real estate companies in Indonesia.The result of this research indicated that cost of borrowing is the factor that significantly determines the capital structure. Obtaining loan from third parties would result higher interest expenses, and in turn result in low net income, compared to companies that use their own source of financing. Of course, the decision to finance a company through loan facilities should be based on in-depth analysis and calculation especially in relation to the company’s capability for settlement. 

2. Promotion of the company

2016 ◽  
Author(s):  
Lee Roach
Keyword(s):  
Third Parties ◽  
Essential Information ◽  
Legal Relationship ◽  
Legal Position ◽  
A Company

EachConcentraterevision guide is packed with essential information, key cases, revision tips, exam Q&As, and more.Concentratesshow you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the legal position of persons in the process of incorporating a company (known as ‘promoters’), and the legal relationship that exists between them and the unformed company and with any third parties who contract with the promoters or the company prior to it being incorporated. A promoter cannot make a secret profit out of the company’s promotion and will usually be personally liable on a contract entered into on behalf of a company if that company had not been incorporated at the time the contract was entered into.

PEMBERIAN HAK GUNA BANGUNAN DI ATAS BAGIAN TANAH HAK PENGELOLAAN

2020 ◽  
Vol 18 (1) ◽  
pp. 70-84
Author(s):  
Triadi Kurniawan
Keyword(s):  
Land Management ◽  
Third Parties ◽  
Regional Government ◽  
Cooperation Agreement ◽  
Legal Effect ◽  
A Company ◽  
Legal Consequences

The granting of Building Utilization Rights above the Management Rights land in the construction of Metro Mega Mall in Metro Lampung City raises problems, namely the legal consequences that arise in the cooperation agreement made by the Regional Government of Metro City and PT. Nolimax Jaya. The main focus of the research is the legal consequences that arise on the implementation of granting rights to build on land with management rights and the concept and application of appropriate and fair laws in the context of carrying out the transfer of management rights of the Regional Government to third parties by providing Building Use Rights certificates. This research uses non doctrinal method. The results showed that the legal effect that emerged in the granting of HGB over HPL was a temporary transfer of ownership to existing land and buildings which resulted in PT. Nolimax Jaya as a company that wants to make a profit, in addition to harming traders who want to open a business in the area.  Keywords : Land Management Rights, Building Rights, Agreement.

scholarly journals COMPANY NAME LENDING OF THE BOARD DIRECTORS TO THIRD PARTIES IN A COMPANY

2020 ◽  
Vol 1 (1) ◽  
pp. 35
Author(s):  
Sidrotul Akbar
Keyword(s):  
Board Of Directors ◽  
Research Methods ◽  
Limited Liability ◽  
Third Parties ◽  
Legal Research ◽  
The Board Of Directors ◽  
Board Directors ◽  
The Republic ◽  
A Company

The actions of the Board of Directors in the form of lending the name of the company to other people who have the capacity to take legal actions on behalf of the company are basically actions that are contrary to Law of the Republic of Indonesia Number 40 of 2007 concerning Limited Liability Companies. If it is done, then it normatively can be understood that the Board of Directors has been negligent in carrying out its duties and responsibilities in running the company. This research was conducted on the basis of the problem regarding the concept of borrowing the company name as an ultra vires act and an analysis of the responsibilities of the Board of Directors for ultra vires actions. This research uses normative legal research methods.

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