Company Law Essay Example | Topics and Well Written Essays - 1250 words

Company Law - Essay Example The specail committee has approved the payment of ?2 million as the consultation fees to Harry for effectively maneuvering acquisition of Durmstrang Ltd.At this juncture, we have to see the powers of such committees. If the main board has delegated the power to the committee to fix any amount as the consultation fees to any director without any ceiling, then the decision of such committee need not to be ratified by the main board. However , if the main board has not delegated the power to such a special committee to decide about any consultation fee to be paid to any director but only can make a recommendation to the main board and then, the main board has the final authority to accept or reject such a recommendation. In such scenario, as the main board has disapproved such payment, then the consultation fees paid to Harry has to be repaid to the company. However , it should be noted that taking Harry’s efforts in successfully handling such merger as it has added value to the company , it is suggested that Board should take into consideration before making any refusal to pay compensation as recommended by a special committee. ... y, is interested in a future business arrangement or transaction, he has the duty to divulge his extent and nature of his interest to other directors or to the Board2. S 177 also requires that the disclosure should be made to the company well before the start of such business arrangement or transaction3. Further, a director is expected that he is aware of the issues of which he ought to be known reasonably on such business transaction4. A director is bound to disclose his interest’s of another person also, if such other person’s interest tantamount to an indirect or a direct interest on the part of such director5. A director should divulge his interest when he ought practically conscious of the conflicting interest in any business transaction6. Further, the general rule as prescribed in s 175(1) restricts unauthorised clash of personal interest of directors with that of the company but not in duty to the company as decided in the case Bray v. Ford7 . In IDC v Cooley (19 72), it was held that Cooley was accountable only for not divulging a business opportunity when getting a sanction to pursue a new business, had the company itself might have seized the opportunity had it known previously8. In IDC v, Cooley case ,when a director who has received any information even in his private capacity but has only one capacity that it is in his capacity as director such information is being received . It was held in Bhullar v Bhullar9 that the infringement of duty emanates from the failure to exchange any relevant information to the company. The appellants were under an onus to divulge the necessary information to the company. (Mantysaari 2005:187). In Gardner v Parker10 , it was held that where the director had not divulged his interest in any business transaction, then such