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Cover Introduction to Company Law

8. Liability and Enforcement  

The effective enforcement of law requires that liability be appropriately allocated, that those with the appropriate incentives be in a position to enforce the liabilities thus created and that the sanctions available be effective. Otherwise, the substantive law may be ineffective in practice.This chapter examines these issues in relation to companies and individuals connected to companies in three contexts: civil law (mainly contract and tort), criminal law, and regulatory rules. Although much of the background law is of general application, it applies in a particular way to companies and individuals engaged in corporate activities.


Cover Company Law

13. Specific conflicts—CA 2006, Part 10, Ch 4, and Ch 4A  

This chapter considers provisions of the Companies Act 2006 (CA 2006), Pt 10, Ch 4, and Ch 4A. These provisions regulate transactions with directors where there is an acute conflict of interest between the director’s personal interests and his duty to the company and so, typically, the statute requires prior shareholder approval of the transaction. The relevant provisions address: directors’ service contracts (CA 2006, ss 188–189); payments for loss of office (CA 2006, ss 215–221); for quoted companies (which must have a directors’ remuneration policy)—remuneration payments and payments for loss of office (Ch 4A); substantial property transactions (CA 2006, ss 190–196); and loans and similar financial transactions (CA 2006, ss 197–214).