Company law (hong kong) Essay Example | Topics and Well Written Essays - 3000 words

Company faithfulness (hong kong) - Essay ExampleThey are the mainspring of the company. Speaking about the importance of directors, Neville J. observed in Bath v. bill Land Co. (1910) 2 chapter 408 that Board of directors are the brain and the only brain of the company which is the body, and the company pile and does act only through them. It is only When the brain functions that the corporation is said to function2.They (Directors) must account for only the companys money and property over which they exercise control. They have to refund to the company any of its money or property which they have improperly paid away or transferred.However, directors are not trustees in the accepted sense of the word because they are not vested with the ownership of the companys property. It is only as regards some of their obligations to the company and indisputable powers that they are regarded as trustees of the company.Alexander v. Automatic Telephone Co. (1900). The directors of a company paid up zilch on their own shares. They however, made all the other shareholders pay 39.6d on each share. They did a intermission of trust, and the directors were bound to pay to the company 35.6d on each of their shares.In PiIn Piercy v .S move & Co. Ltd (1920). The directors of the company had the power to issue the uninsured shares of the company. The company was in no need of further chief city but the directors made a fresh issue to themselves and their supporters with a view to maintain control of the company. Held the parcelling was invalid and void.In Peraval V. Wright, (1902). The directors of a company bought shares from a shareholder, while they were negotiating for the sale of the company to another of a very high price and they did not disclose this fact to the shareholder. The shareholder sued to have the sale slew a side. Held the sale was binding as the directors were under no obligation to disclose negotiations to the shareholder.The law imposes these directo rs duties upon them so that they are not allowed to capitalise their strategic position in the company to serve their own involvement 3. The Australian Uniform companies act has incorporated statutory provisions containing an explicit reference to the judiciary obligation of directors towards their companies. Section 24 of the Australian Companies Act statesi. A director shall at all measure act honestly and use reasonable