11/25/2012 Board of Directors Can members impeach actions of the board? Interpretation of the particular article: Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame [1906]2 Ch 34 (Court of Appeal) 11 Interpretation of former reg 82 ·Former reg82: "The business of the company shall be managed by the directors,who may pay all expenses incurred in promoting and registering the company,and may exercise all such powers of the company as are not, by the Ordinance or by these regulations,required to be exercised by the company in general meeting, subject nevertheless,to any of these regulations,to the provisions of the Ordinance and to such regulations...as may be prescribed by the company in general meeting…”. 6
11/25/2012 6 11 • Can members impeach actions of the board? • Interpretation of the particular article: Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame [1906] 2 Ch 34 (Court of Appeal) Board of Directors 12 Interpretation of former reg 82 • Former reg 82: “The business of the company shall be managed by the directors, who may pay all expenses incurred in promoting and registering the company, and may exercise all such powers of the company as are not, by the Ordinance or by these regulations, required to be exercised by the company in general meeting, subject nevertheless, to any of these regulations, to the provisions of the Ordinance and to such regulations ... as may be prescribed by the company in general meeting ...
11/25/2012 Interpretation of former reg 82 "The business of the company shall be managed by the directors..."[A] "who may pay all expenses incurred in promoting and registering the company,and may exercise all such powers of the company as are not,by the Ordinance or these regulations,required to be exercised by the company in general meeting... [B] ."..subject,nevertheless,to...such regulations ..as may be prescribed by the company in general meeting..."[C] 13 Cases General view:management powers vested exclusively on board unmingnamer Syndicate Co Ltdv Art 96 vested in the directors "the management of the business and the control of the company Art 91 empowered the board to sell any property of the company on such terms as they may think fit A resolution is passed on the general meeting directing the board to sell the co's undertaking to a new co formed for that purpose,directors disapproved Warrington J:"the majority could not impose that obligation upon the directors' Collins MR:"it is not competent for the majority of the s/ers at an ordinary meeting to affect or alter the mandate originally given to the directors" ‘品e68erCt品983 ontract"and "mutual stipulations >
11/25/2012 7 13 Interpretation of former reg 82 • “The business of the company shall be managed by the directors ... ” [A] • “who may pay all expenses incurred in promoting and registering the company, and may exercise all such powers of the company as are not, by the Ordinance or these regulations, required to be exercised by the company in general meeting ...” [B] • “ ... subject, nevertheless, to ... such regulations ... as may be prescribed by the company in general meeting ...” *C+ 14 Cases • General view: management powers vested exclusively on board Automatic Self-Cleansing Filter Syndicate Co Ltd v Cunninghame [1906] 2 Ch 34 • Art 96 vested in the directors “the management of the business and the control of the company” • Art 91 empowered the board to sell any property of the company on such terms as they may think fit • A resolution is passed on the general meeting directing the board to sell the co’s undertaking to a new co formed for that purpose, directors disapproved • Warrington J: “the majority could not impose that obligation upon the directors” • Collins MR: “it is not competent for the majority of the s/ers at an ordinary meeting to affect or alter the mandate originally given to the directors” • Cozens-Hardy LJ refers to the “express contract” and the shareholders’ “mutual stipulations