Legal Aspects of Business

Legal Aspects of
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
The legal dimension or aspect generally defined as the terminology of law identified by the
legislative branch of the country. In this context, certain regulations and laws are clarified which
are obligatory to be regarded at the phase of decision-making. When the organization fails to
conduct its element of the work/job in any circumstance, there is a heightened risk that
disciplinary action will be taken against the organisation (Pathak, A., 2013). In the sense of the
study, there is thorough explanation of the duties of directors to whom they are expected to carry
out whatever work inside the premises of company. Further, here in studymultiple case laws and
examples are also discussed to understand topics.
MAIN BODY
Referring to the applicable laws and case law, the director of a company objectively addresses
the following duties: duties to act within powers:
The Companies Act,2006 outlines the rules and procedures that must be practiced by any
corporation before taking a decision or making policies. There are also certain guidelines and
legislation for directors that ought to be practiced. Here in the act, section 171 outlines the
duties to act in under the specified powers, here this has been stated that directors are not in a
position to take either of those actions where their authority or powers does not exist or beyond
the such powers. Any decision made or action taken by a director should be permitted by the
majority of members, otherwise disciplinary actions can be enforced against the act of
director.Based at the current circumstance, it is very essential to carry out certain works where
proper protocols have to be pursued. In the context of Section 171 of Company Act 2006, there
is a specific description of the 2 main tasks to be carried out by company directors. First, they
must be carried out in compliance with the Article of Association (AOA) or constitution of the
corporation. The second obligation to be fulfilled under section 171 is to execute powers
exclusively for the objectives for that they have been conferred on corporation. These are main
powers to be taken into account by every director in the exercise of their duties (Companies Act.
2006).
Section 172(1) sets out and implements substantial follow-up duties on director which
are to be discharged by every director; (a) the possible effects of any lengthy-term decisions on a