A dispute between directors, business partner or shareholder can arise from several reasons. They could come from:
- Breaches of the duty as a director
- Disparities between salaries
- Various direction, management and strategy in a company
- Excluding shareholders from board meetings
- Directors having separate or conflicting business interests
- Breaches of the agreement as a director
- Director misfeasance claims
- The director voluntarily resigns from the board
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Your Company’s Articles of Association usually set out the rules which apply regarding how decisions are taken. The chairperson should refer to these in situations of potential conflict. In most cases, these state that motions are passed by the approval of a majority of the directors present at the meeting. They often also allow for the chairperson to have a casting vote where the directors are split 50/50. They may also set out a minimum number of directors required to be present at a meeting (‘quorum’) for any decisions to be taken.
If the number of directors is below the quorum required by the Articles of Association to take a decision, then no decision can be taken. If the number of Directors at a company falls below the number required, the company’s shareholders would then need to call a general meeting to either appoint new directors or amend the articles.
It is common for a company’s articles of association to require directors to be given notice of any board meetings. If that is the case, and you were not given appropriate notice, then the decision will be legally invalid. You could apply to the court for the decision to be overturned. In general, however, company law does not entitle directors to such notice. Even where you are entitled to notice of the meeting and its agenda, other decisions could be taken under ‘any other business’. The only time when you must be given notice is if a board meeting (or general meeting of shareholders) is to discuss your dismissal as a director.
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