By Paul Raby

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Public limited company (plc) A limited company that can offer its shares direct to the public. Table A A model set of Articles of Association for the management of a company limited by shares. 1 go wrong, particularly if they have not taken precautions. For example if you are trading with a company which becomes insolvent, the only assets available to the creditors are those of the company. Some third parties protect themselves by taking guarantees from the directors, thus giving themselves access to the directors and their assets should the company be wound up.

1 Putting the case Q From the Squash Strings Ltd case study, what type of directors are Tim, Roger and Greg? What are the implications of your answer? A It would appear that each of them is an executive directors, as they are all involved in the day-to-day management of the company. This means that they are responsible for the management of the company. Their powers will be described in the Articles of Association. The company does not 6 appear to have any non-executive directors and there would appear to be no need for alternate directors.

This was made easier by the fact that P and H had pre-signed blank cheques, allowing the details to be added later. The company brought an action against all three directors for alleged negligence and misappropriation of the company’s property. It was held that all three directors were liable for damages. S, as an executive director, was held to be grossly negligent. P and H were held to have failed to show the necessary level of skill and care in performing their duties as non-executive directors, even though it was accepted that they had acted in good faith at all times.

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