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directors - Coggle Diagram
directors
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indemnity
Indemnification for Liability Related to Official Duties:A company is allowed to indemnify an officer or auditor any cost incurred relate to proceedings:
- if they are found not guilty
- acted within their duties and responsibilities
- Where the auditor is granted relief under the Act.
- Where the legal proceedings are discontinued or not pursued.
Indemnification for Liability to Third Parties
- cover their legal expenses and potential liabilities arising from claims brought by third parties.
The company CANNOT pay your fines or penalties if found guilty of a crime.
The company CANNOT pay your costs if convicted of a crime.
Type of directors
Executive
- salaried
- full time working
Non executive
• Not salaried, only directors fees
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Registers
• Full name
• Residential address
• Date of birth
• Business occupation
• NRIC
• Particulars of their directorship
• Any changes, must update Registrar within 14 days
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DISQUALIFICATION
• Bankrupt
• Convicted offence fraud, bribery, dishonesty (in/outside)
• Convict offence related to promotion, management, corporation
Power of court to disqualify:
Within 5 years, has been directors of > 2 companies that goes insolvent
Contravention of duties of directors
APPOINTMENT
• 1st directors: named during incorporation
• Subsequent: ordinary resolution during AGM
• Must consented & made declaration
Duties & responsibility
• Fiduciary duty (act in good faith & best interest of company)
• Duty of care (exercise reasonable care, diligence,skill)
• Breach of duty: either one
Prison up to 5 years
Fine up to 3 million
Both
responsibilities with FS
- make sure prepare according to standard & relevance law
- kept the accountung record
- ensure consolidated FS include subsidiaries
- BOD need to approve and make statutory declaration
interest in contract
- any director who is directly or indirectly interested in a contract or proposed contract with the company must declare the nature of their interest at a meeting of the board of directors
- director with interest will be counted as quorem, but cannot vote on propose contract
dividend payout
- distribution/dividends is only taken from the company’s profits
- directors can authorize distribution only if co. satidy solvency test
solvency test: able to pay debt when due within 12 month after distribution
S218 without consent of general meeting, director shall not use:
- his position
- property of co
- any info that acquired thru his position
- engage business that compete with co
to gain benefit for himself
Requirement of Co Approval- S223 & S228
• If directors want buy an asset/property of a "substantial value" or sell a large part of the company’s business or property
• Approval through resolution
What counts as “substantial”:
• For listed companies and their subsidiaries: based on the value set in the listing rules.
• For unlisted subsidiaries of listed companies: value > 25% of either: —whichever is the highest.
• The company’s total assets,
• Its total net profit, or
• Its issued share capital
RESIGNATION S208 (2-3)
• Director may resign by giving written notice to company
• It will be effective on the day the notice is delivered
Sole director resignation
• Cannot simply resign, must do meeting with s’holder and appoint a director to replace
• In the case of disqualification, death or mental, CS must call a meeting with next of kin/shareholder to appoint new director
• If fail to appoint new director within 6 months, CCM may strike off
REMOVAL
- issue special notice (28 days before)
- convene meeting
- Section 207(3): right to be heard at the meeting and/or provide written representations.
RETIREMENT
- By rotation: 1/3 of board, whichever longest
• All directors shall retire once at least each 3 years