Law of Business Enterprises: Exam 1, Section A, Question 1

LAW Of BUSINESS
ENTERPRISES

Table of Contents
EXAM 1...........................................................................................................................................3
SECTION A.....................................................................................................................................3
QUESTION 1..............................................................................................................................3
SECTION B.....................................................................................................................................5
QUESTION 4..............................................................................................................................5
QUESTION 6..............................................................................................................................6
EXAM 2...........................................................................................................................................7
QUESTION 1..............................................................................................................................7
QUESTION 2..............................................................................................................................8
QUESTION 3..............................................................................................................................9
QUESTION 4............................................................................................................................10
REFERENCES..............................................................................................................................12

EXAM 1
SECTION A
QUESTION 1
A)
Issue: In this case study, the issues is raised in the Higson's Ltd regarding not managing the
duties in right manner. As there are three executive directors in the company who are assigned
the particular work which is to be stipulated within the particular time period (Repiquet, 2018).
The issues are raised regrinding acquiring the land which the board feel that it the director’s
duties to take the right decision to secure from the debts.
Rules: Under the Companies Act, 2006 the statutory duties of the directors are resulting to
taking the foster decision, so that they can retain the business for longer time period. Thus, in
respect of undertaking the matters related to common law, duties of directors it is relating to
undertaking the decisions of discretion. Their main duty is to avoid conflict of interest which can
be either personal or professional terms. In relation to examining the matters related to statutory
law, the director’s duties are to be maintained the statutory obligation such as working under the
terms and condition which is mentioned in law and not blindly depends upon the contract. In
context of avoiding the conflict of interest directly or indirectly, it carries various duties under
the following sections such as:
Section 174: Directors carry reasonable care and duty regarding undertaking the matters such as
maintaining close relationship with employees or resolving disputes if any they face in attaining
task in right manner.
Section 175: In these sections, directors must avoid the conflict through which they affect the
dignity of the company by not managing the personal and professional life in right manner.
Thus, directors carry the duties in respect of avoiding the conflict which arises through using the
company information for personal use or not taking strict action regarding avoiding offences in
company (Morse, 2016).
Section 176: It stated that directors must not enjoyed the benefits which is gained from the
involving themselves as third parties. This is one of the reasons regarding facing disputes in
respect of resolving matters as third party.

Section 177: In this, directors had to inform or take consent from the directors before taking any
decisions. As most of the conflict is arises through not taking the appropriate suggestion with any
of the directors who are working as the same post in the company (Rahman and Ghadas, 2018).
Thus, in such manner it is examined that directors, shareholder and any other officer who carry
the power to manage, control and exercise the matters of the company must play the role of the
fiduciary duty. Thus, directors had to disclose all such matters or any of the information which is
the basic priority of the clients regarding knowing the facts regarding the company working.
In the case of the Regal Hastings v Gulliver [1942], the case states that Regal owned a
cinema in Hastings in respect of taking property on lease, they had to give personal guarantee to
the landlord. In such manner the money is invested by the Regal itself and also four directors of
the company, company solicitors and subscribers (Regal (Hastings) Lts V Gulliver [1942]
UKHL, 2019). But after settling all the amount, the beneficiary file the suit against the company
regarding committing breach of the fiduciary duty, as they not informed the shareholder
regarding the overall planning. In such manner, the breach is conducted regarding violating the
corporate opportunity by not maintaining the duty of loyalty at work place.
Application: By applying this section in the relevant case study, it is stated that Aisha and Diana
who are at the post of the directors had conflicted their duty which are covered under the section
175, 176 and 177 of the companies act, 2006. Under the corporate opportunity, directors had to
carry the fiduciary duty in respect of maintaining loyalty during accomplishing the task. Thus,
they are liable to be undertaken under section 175-177 of the director’s duties to maintain dignity
of the business. In respect of Paul, who is at the post of the sales directors had to work according
to the set budgets as he had to maintain duty of care and skills during examining the matters.
Similarly, in case of Re City Equitable Fire Insurance Co as the claims are imposed in respect of
not taking care during acting the task as by this aspects company had to face the issues regarding
paying £1,200,000 for the losses incurred.
Conclusion: From the above study, it is concluded that directors carry certain duty when they
are attaining the post of taking the right and critical decisions (Baker, 2019). In respect of
corporate opportunity doctrine, the duty of directors is adapted the fiduciary duty of loyalty
regarding accomplishing the task or maintaining dignity in business. Thus, under the statutory
and common law, director’s role is crucial, and they had to maintain certain care in attaining the
work in right manner.