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Legal Aspects of Business doc

Added on - 07 Dec 2020

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Legal Aspects of Business1
TaskDuty to act within powerScope of Company LawThe company law in UK can be traced to the Companies act 2006. This act can be considered asone of the largest acts in the UK parliament history. This act came as a replacement of theCorporation Tax act 2009. There are diverse aspects that are traced under this act. One of the keyroles of this act is to provide a detail description of the duties of director. This is the chief topicof discussion in this act. Apart from the aspect takeover directives and transparency directivesare also part of this. Different provisions of public and private companies are being considered inthis act as well. This act provides a singular law across UK. This act can be considered asmassive because of the fact that majority of the clauses of the Companies Act 1985 is beingreplaced by this act. The director’s duties are covered in the sections 171 to 177 (Hood, 2013). Inthis particular piece of writing the section 171 is being discussed.Duty of DirectorThe section 171 of Companies act 2006 discusses the duty of the director to work within power.The section 171 has two sub clauses a and b. The subsection (a) of this act states that the directorshould act according to the constitution of the company. It is important to mention in this sectionthat it is important for companies to set its own constitution during the formation of thecompany. Once the constitution is formed it is the duty of the director to work according to theconstitution of the company. The second sub section is section (b) this section states that thedirector should exercise power only for the purpose of which the power has been given to thedirector. These two are one of the key duties of the director according to the Companies act 2006(Legislation.gov, 2020). The section 171 confides the duty of the director to the set limitations.To elaborate the statements that have been stated in this section involves the fact that there is aspecific term for which power is being granted to the director so according to the principle of lawit is important that the director should act only for the purpose of which the law has been formed.Also the purpose should be for any particular situation which is under the consideration of thescope of the law. Furthermore, it is also stated that the director must conform to the rules and2
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