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Help Please

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Help Please

  • This topic has 1 reply, 2 voices, and was last updated 13 years ago by MikeLittle.
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  • November 11, 2011 at 2:29 pm #50437
    nishta87
    Member
    • Topics: 7
    • Replies: 14
    • ☆

    Hi

    Can you plz explain me the difference between de facto and shadow directors

    Thanks Anishta

    November 27, 2011 at 8:15 pm #89577
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    This is what you get if you put de facto director and shadow director into google:

    De facto director:
    Person who is not a de jure director but performs the acts or duties of a director, or is judged to be a director in law. Any person who is not technically a director but according to whose directions and instructions (rather than expert or professional advice) other directors and/or employees are accustomed to act is legally deemed a de facto director. Whether or not such person fulfills the qualifications of a director, or enjoys the rights and privileges of a director, he or she is generally held liable as a de jure director. See also shadow director.

    Shadow director:
    Holder of controlling or majority stock (share) of a private firm who is not (technically) a director and does not openly participate in the firm’s governance, but whose directions or instructions are routinely complied with by the employees or other the directors. In the eyes of law, he or she is a de facto director and is held equally liable for the obligations of the firm with the other de facto and de jure directors.

    My understanding ( put I’m not an LLM ) is that a de facto director is one who holds himself out to third parties claiming that he IS a directr and then puts the company into contracts even though he is not authorised to do so.

    A shadow director ( in my understanding ) is one who hides behind the veil of incorporation and is effectively pulling the strings of the directors who dance like marionettes to the shadow’s instructions

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