Directors remuneration - company management, Business Law and Ethics

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Directors' Remuneration:

For technical reasons the directors are not regarded as servants or employees of the company of that they are directors. Therefore  here they have no right to be paid for their services unless there is a provision for payment in the articles. In the case of companies which have adopted Table A, Article 76 provides that "the remuneration of the directors shall from time to time be determined by the company in general meeting." Conversely in Re: Duomatic Ltd it was explained that a provision in the articles authorizing payment of directors' remuneration does not, per se, give the right to be paid any specific amount. There must also be a resolution passed by the company in general meeting authorizing the payment.

Provided the resolution has been passed, hence the remuneration is payable where profits are earned or not: Re: Lundy Granite Co. Article 76 provides that "the remuneration shall be deemed to accrue from day to day". Because a director one who vacates office before completing a year or a month in office is entitled to a proportionate part of his yearly, or monthly salary: Moriarty v Regent's Garage Co.


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