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Company Law: Company Law Reform Bill
Pages 10 (2510 words)
The Companies Bill (earlier popular as the Company Law Reform Bill) is a major step towards extensive reform of UK company law. The government considers that these principles while long established lack certainty and are not easily accessible. Very often, directors have to take advice in these areas so as to ensure that they do not inadvertently breach any duty enshrined in the case law…
The main proposals in respect of the Directors' duties include: a statutory statement of directors' general duties; and an extended power for shareholders to sue directors for negligence and other defaults. Presently the general duties that a director owes to the company were invariably established though case law rather than statute making it difficult for such duties to be comprehended and pressed for implementation. The Bill includes a statutory statement of directors' general duties both to make the law in this area more accessible and to change the law where it no longer corresponds to modern business practice. The clauses 170-187 of the Companies Bill 2006 carry a major portion of such codification Other changes are made which affect directors, including simplification of the law relating to transactions between a company and its directors. This paper would discuss the changes brought about in the new legislation in respect of directors' duties and how these changes present an altered and improved stance over the hitherto adopted practice of deriving directors' duties through interpretation of case laws.
The governments intended to plain speak on the directors' duties so ...
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