ABTC Ltd is a recently established company where two shareholders/directors have set up a biotechnology business.
The company forecasts high growth prospects and is managed by an experienced and ambitious team who are capable of turning their business plan into reality. M/s Hanna Amakye an employee of ET capital, provider of venture capital funds to this biotechnology start-up has been invited to sit on the Board of Directors of ABTC Ltd. Susie is now seeking your advice on the following issues:
Hanna is concerned that the company’s affairs are being handled in a relatively informal manner. She has asked for advice on her position as a non-executive director (NED) given that Joe Soap and Joe Bloggs are the executive directors of ABTC Ltd?
Hanna asks you to list and summarise the Common Law fiduciary duties of directors?
Hanna has heard that company directors occasionally use company assets for personal purposes unrelated to the company’s business. Briefly explain why some of these transactions are legally prohibited and for the benefit of whom?
Briefly discuss, citing relevant statutes and case law; the circumstances in which the veil of incorporation may be lifted at common law and under the Companies Act 1963, (Act 179)
The requirements that must be met under company legislation before a company may pay a dividend.