Compensation for loss of office - company management, Business Law and Ethics

Compensation for Loss of Office:

(a) Section 192 makes it unlawful for a company to make a director any payment by way of compensation for loss of office, or  may as consideration in favour of or in connection with his retirement, unless particulars of the proposed payment, including the amount, are disclosed to the members of the company and the proposal is approved by the company in general meeting. If the payment is not disclosed and approved, the director to whom it is paid shall be deemed to have received it in trust for the company. The directors who paid the money are liable to repay the money to the company : Re: Duomatic.

(b) Section 193 makes it unlawful, in connection with the transfer of the whole or any part of the undertaking or property of a company, so therefore any payment to be made to any director of the company by way of compensation for loss of office or on retirement unless particulars are disclosed and approved. If such a payment is not disclosed the director holds it upon trust for the company.

(c) Section 194 deals with the situation where the shares of the company are being transferred. It applies where the transfer results from-

i. an offer made to the general body of shareholders;

ii. an offer made by another company with a view to the company becoming its subsidiary or a subsidiary of its holding company;

iii. an offer made by an individual with a view to his acquiring at least one-third of the voting power at any general meeting of the company; or

iv. any other offer which is conditional on acceptance to a given extent.

If a payment is made to a director as compensation for loss of office or on his retirement in any of the aforesaid circumstances, he must take reasonable steps to ensure that the particulars of the proposed payments are disclosed in the offer. If this is not done, the director holds the payment on trust for the persons who have sold their shares as a result of the offer.

Posted Date: 1/12/2013 4:48:00 AM | Location : United States

Related Discussions:- Compensation for loss of office - company management, Assignment Help, Ask Question on Compensation for loss of office - company management, Get Answer, Expert's Help, Compensation for loss of office - company management Discussions

Write discussion on Compensation for loss of office - company management
Your posts are moderated
Related Questions
Define  Accession and ratification Another area/aspect that needs to be highlighted with regards to a Treaty is the difference between signing and ratifying a particular treaty

Recovery of Premium - S. 44 One partner has paid a premium for another on entering in a partnership to a fixed term such and the partnership is dissolved previous to the expir

Assignments submitted after the due date in the absence of an extension will incur a marking penalty. An extension must be applied for in writing before the due date. Extension app

State the legal consequences of an wrongful act Article 28, 30 and 31 state the legal consequences of an internationally wrongful act. They are as follows:- Article 28: Lega

State Article 3 of air and outer space law Article 3 refers to the fact that the Convention would be applicable to the civil aircraft only and not to the state aircraft. Also,

As you think about the rights of workers enhanced by anti-discrimination laws, have society and organizations become more tolerant and competitive due to less discrimination in the

QUESTION 1 What are the consequences of a unilateral modification of a contract of employment of indeterminate duration by an employer? QUESTION 2 (a) In what circumsta

Duty of an auditor: The duty of an auditor generally was very carefully considered by this court in RE: LONDON AND GENERAL BANK (1895) and I cannot usefully add anything to wh

Exceptions to the rule in Foss v Harbottle:  According to Professor Wedderburn, the so-called exceptions are essentially no exceptions at all.  They appear to be circumstances

Statutory report - meetings and resolutions: Contents of the statutory report.  Section 130(3) provides that the statutory report shall be certified by not less than two direc