Company law Case Study Example | Topics and Well Written Essays - 2250 words

Company law - Case Study Example tors of Made in Wales (MIW) of refusing to buy the land only for them to allow Lisa to buy the land and then resell it to the firm at a much high profit margin, the officers are liable and the firm as a whole was liable. However, considering that the person who is suing the firm one of the shareholders, the liability in this case will not be on the firm but the directors. However, since Derek was not directly involved and he had not been attending board meetings, he may be exempt from this. Derek was not officially aware of this transaction and therefore from a legal point of view, he is not at default. Part (b) of section 82 also outlines that a person guilty of such an offence is can be prosecuted and given the punishment hat is in line with his or her offence. However, it also provides that for continued contravention, a daily default fine may apply. However, even though Derek had not attended any meeting, and was not involved in the transactions that led to MIW being in trouble, he still bears some responsibility as a director. In Re Hydrodam (Corby) Ltd [1994] 2 BCLC 180, the court made a decision, which showed what a shadow director is. This could be useful a court of law to implicate him. Section 197 outlines that for a company to give loans it requires members approval (Van Duzer, 2007). Subsection 1 of this section outlines that company may not (a) make a loan to a director or (b) give a collateral or provide security for a loan given to any of its directors director by any person or party. The section however gives an exception such as when such a transaction when the shareholders of the company have given an approval by a resolution. Section 209 however outlines that for money-lending companies, such an approval does not have to be there as long as the loan is through the correct procedure that would be in place when giving a loan to any other customer. In such a case, the do require would not be getting the loan or the security to a loan as a director