Directors And Shareholders

1998 Words Dec 19th, 2014 8 Pages
Directors and shareholders are the two main organs that make up a company. Section 250 of Companies Act 2006 defines director as ‘any person occupying the position of director, by whatever name called’. Directors have the responsibility to manage the company as they may exercise all the powers of the company. Whether or not a person uses the title of director is irrelevant in determining whether such person is a director, someone who is described as manager or governor can possibly be a director. Similarly, companies may give their employee titles such as sales or marketing director, without really occupying that position in law. There are 3 classes of director, the de jure director, de facto director and the shadow director, for the purpose of this essay, the de facto director is the only one that will be concerned.

There is no legislative provision that gives a clear definition about de facto director, it has a reasonably long lineage, being referred by Jessel Mr in Re Canadian Land Reclaiming and Colonizing Co. Traditionally, de facto director is used to describe situation when there is a purported but defective appointment of a director and such person proceeds to act as a director. However, in cases such as Re Lo-Line Electric Motors Ltd and Re Hydrodam (Corby) Ltd , it was held that the term ‘de facto’ could apply to someone who merely performs the functions of a director, not necessarily dependent upon an appointment. Several members of the Supreme Court in…
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