Corporate Governance and Directors’ Duties

Corporate governance of LTD companies

Part 4 of the Companies Act 2014 is divided into 10 chapters, spanning sections 127 to 218.  This part deals with the arrangements which private companies limited by share capital (“LTDs”) must put in place in relation to the governance of the company.  Many of the provisions are administrative in nature dealing with company constitutional matters such as the requirements regarding numbers of directors, qualifications of the company secretary, the powers of directors, the holding of members’ meetings and the making of resolutions. 

 

Read more about Significant changes in corporate governance requirements under the Companies Act 2014.

 

Duties of directors and other officers

Part 5 is  entitled “Duties of Directors and Other Officers” and consists of 6 chapters and covers sections 219 to 271.  Amongst other things, this part sets out in statute for the first time the fiduciary duties of directors previously underpinned by common law only. 

 

Duties relating to other types of companies

  • Section 964 and Chapter 4 of Part 16 amends or adds to the provisions in relation to corporate governance and directors’ duties for Designated Activity Companies (“DACs”).
  • Section 1002 and Chapters 8 and 9 of Part 17 amend or add to the provisions in relation to corporate governance and directors’ duties for Public Limited Companies (“PLCs”). 
  • Section 1173 and Chapter 4 of Part 18 amends or adds to the provisions in relation to corporate governance and directors’ duties for Companies Limited by Guarantee ("CLGs").
  • Secction 1230 and Chapter 4 of Part 19 amends or adds to the provisions in relation to corporate governance and directors’ duties for unlimited companies.

 

 

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