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COMPANY LAW - Coggle Diagram

- - - - 213 - Duties and responsibilities of directors
      - 217 - Responsibility for actions of delegatee
      - 218-Probihition against improper use of property,position,etc
      - 228 - Transaction with directors, substantial shareholders or connected person
      - 539 - Liability where proper accounts not kept
  - - - Fiduciary duties (▪ Bona fide ▪ To act diligently ▪ To ensure that there is no conflict of interest) Duty of care and skills (▪ Expectation of a reasonable man ▪ Delegation of authority)
      - Situation of Conflict under Common Law Position applicable when director makes a personal profit while acting his position
        
        Regal(Hastings) Ltd v Gulliver (1942) Director make secret profit
    - - 213(1) - good faith in the best interest
        of the company
        
        Re W & M Roith Ltd (1967) - wife : not legally binding
      - 213(2) - reasonable care,
        skill and diligence
      - 213(3) - Imprisonment not exceeding 5 years or a fine not exceeding three million ringgit
      - 215(1) A director may rely on Information, professional or expert advice, Opinions, reports or Statements presented or made by any officer of company, Another director or committee to board of directors.
      - 214 (1) - A director who makes a business judgment is deemed to meet the requirements of the duty under subsection 213 (2)
      - 215(2) -Such reliance made by director must be made with good faith and after making an independent assessment.
      - 216(1) - The directors may delegate any power of the Board to any committee of the Board, director, officer, employee, expert or any other person.
      - 218(1) - A director or officer of a company shall not, without the consent or ratification of a general meeting to gain directly or indirectly, a benefit for himself or any other person or cause detriment to the company:
        
        Use the property of the company
        
        Use any information required by virtue of his position as a director or officer of the company
        
        Use his position as such director or officer
        
        Use any opportunity of the company which he became aware of, in the performance of his functions as the director or officer of the company
        
        Engage in business which is in competition with the company
        
        Cooks v Deeks (1916) - 3 italian ambil customer majikan (held : need to give their secret profit and customer back)
      - 219(1) A director shall give notice in writing to the company of the particulars relating to the shares, debentures, participatory interests, rights, options and contracts
      - 219(2) Imprisonment not more than 5 years or a fine not more than RM3 million or both
        if langgar 219(1)
      - 221(1) - whether directly or indirectly, interested in a contract or proposed contract with the company shall declare the nature of his interest at a meeting of the board of directors.
      - 219(4) A company shall send a copy of the notice to each of other directors within seven days. Failure to do so will impose penalty of RM 25 000 under Section 219(7) of the
        same Act.
      - 222(1) - Any interested director shall be counted only for quorum and shall not participate in any discussion which the contract or proposed contract is being considered during the meeting and shall not vote.
      - Additional Duties and Responsibilities
        
        Section 223 - Duty to obtain approval of company in disposing company’s property or undertaking
        
        Section 248 - Duty to prepare financial statement
        
        Section 312- Duty to call meetings required by members
        
        Section 324- Duty to circulate member's statement for public company
  - - - Exceptions in Section 224(2)
        
        Funds for full-time employment director- to acquire home
        
        Funds for full-time employment director- for approved schemes for employer
        
        Funds incurred for the purposes of the company/perform his duties
        
        225(1) - company is generally prohibited from making loans/provide security to persons connected with its directors
        
        225(2)
        
        Loan for subsidiary or holding company
        
        Company whose ordinary business
        include lending money
        
        Loan to persons connected with directors for purchase of home or loans under approved scheme.
        
        Persons connected with directors
        
        197(1) - “A person connected with the director”: a member of that director’s family, a body corporate which is associated with that director, a trustee of a trust which the director is a beneficiary, a partner of that director
        
        197(2) - a member of that director's family” shall include his spouse, parent, child (including adopted child and stepchild), brother, sister and the spouse of director’s child, brother or sister.
- - - - Body corporate. An artificial legal person created by statute
      - has a legal personality separate from its members.
        Obligations and liabilities are its own and not those of its participants.
      - continue in existence until is it removed
      - Capable of exercising all functions as an incorporated company
      - Capable of suing and be sued
      - Has the power to obtain, hold, develop or dispose of property
      - has the power to enter into transactions/contract
    - - STATUTORY EXCEPTIONS
        Section 123 - Offence relating to financial assistance to purchase shares
        Section 131 - offence relating to distribution out of profit
        Section 132 - Offence relating to unauthorized distribution
        Section 540 - Fraudulent trading (in course of winding up or in any proceedings against a company
      - Judiciary Exceptions
        
        FRAUD
        
        used the principle to evade or abuse from legal obligation
        
        used the principle to do something forbidden from doing
        
        Case: GILFORD MOTOR CO LTD V HORNE (individual)
        [unjustice/unethical sebab horne dah janji tak amik customer gilford. so, company and horne satu entity]
        
        AGENCY: SUBSIDIARY AND HOLDING COMPANY
        
        subsidiary acting as an agent for holding company, may be bound by the same liabilities and rights but no court has yet found subsidiary companies liable for their holding company's debt
        
        Case: SMITH, STONE & KNIGHT LTD.V BIRMINGHAM CORPORATION ( Agency)
        HOTEL JAYA PURI BHD V NATIONAL UNION OF HOTEL, BAR & RESTAURANT WORKERS & ANOR (Single Economic Entity)
        
        TAX AVOIDANCE
        
        companies transfer assets between subsidiary in order to reduce tax liability
        
        however the courts recognised that both company are a single enterprise and treat them as a single unit
        
        Case: BULLOCK (H.M INSPECTOR OF TAXES V UNIT CONSTRUCTIONS CO. LTD) (Tax Avoidance)
        [manage company from UK that registered in East Africa, but still liable to UK tax