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Dear Sir,
Firstly I would like to thank you for the fantastic learning opportunity you have provided to the students worldwide through this very interactive websites filled with interesting lectures & notes. I am really thankful as your F4 lectures were the only way of training for me; as I could not receive any training otherwise.Sir, I have a question regarding the authority & liability of the director. I am clear that a director can act on behalf of company even though he is not been officially appointed as an MD… & he binds other BOD & members by the contract & liability due to apparent authority. But I am not sure if same applies for the De facto & the shadow directors? Kindly help.
Thanks & regards
A shadow director will not actually come out of the shadows and is only shown to exist when there is a question of liability. Shadow director is a person in accordance with whose instructions the directors are accustomed to act. So he will give the instructions but will not himself enter into contracts.
A de facto director would be able to bind the company in contract even though not properly appointed on the basis that the other directors are aware of his actions and have taken n steps to prevent those actions
Thank you for the reply.
Does that mean a de facto director will have an apparent authority to bind but shadow director doesn’t? Also both the shadow director & de facto director may face a liability depending on the circumstances of the case scenario?Agreed with your second question. As to the first question, yes a de facto director may well themselves liable as well as the company being liable.
However, a shadow is not likely to enter into a contract ( it would mean coming out of the shadows ) but could well find that, as a result of acting as a director ( even in the shadows ) a Court could find him / her to be liable
Dear Sir,
Would you please help me understand how share capital is calculated, I seem not to get the logic behind it.
Also please advise which exam questions to expect this december sitting.
Thank youIt’s the number of shares in issue multiplied by the face value / nominal value of those shares. It’s not really a matter of logic. The only potential problem is if the face value is ot $1. In that case 600,000 equity shares of 50c each will appear on the Statement of Financial Position as the $ value of $300,000 whereas if they were $1 face value, the figure on the Statement of Financial Position would be $600,000
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