The paper "Cities in a Globalizing World" is a wonderful example of a Management Assignment. According to the case of Salmon vs. Salmon and co, it was held that the company was a separate legal entity from its owners thereby limiting the owners from being called upon to pay the debts of the enterprise. From this, a company is an independent legal body, headed by directors. In legal business terms, a director is an individual bestowed with the management of the company. After the initial stages of company registration and formation by promoters, the directors are appointed, or the promoters are awarded to be the promoters of the company.
A director also has a right to own shares in the company thereby being owners of the company. A company director is expected to act in good faith on behalf of the company and with a sense of purpose. Although the directors are not directly involved in the operations of a company, they take part in ensuring that their junior manager’ s actions are in line with the company’ s obligations. The directors oversee the operation of the business through the company’ s CEO and thereby they are involved in the company’ s operations.
On the issue of whether the Directors should be held liable for the financial position of the company depends on many factors since by law, the directors cannot intentionally take any activities that would lead to the company's debts to upsurge or either goes unpaid (Bosch, 2013. Pg102) The factors include; Favoritism-If in case the directors show any favoritism towards any particular supplier of any creditor. This will show that the Director is influencing the company’ s financial position thereby being held liable for the financial position of the company in case of issues like insolvency. Director’ s actions. According to the law, the company directors are expected to act in good faith and with a sense of objectivity towards the company’ s’ objectives.
If any director fails to meet his or her essential duties of law, they are probably supposed to face severe personal liabilities and job disqualification as a director of a limited company or even in the future. The directors’ action of dividends is also important.
If the director continues to pay shareholders dividends while the company is insolvent or in financial fallout just like in the case provided, the shareholders were in the right position to institute legal charges on the directors (Robertson, 2012, p. 95). The directors may also be held fully liable for the financial position of the company on many other instances that may include, • Applying fraudulent methods to raise the funds needed to repay creditors, for example, obtaining financing using any misleading or through inaccurate information just like in the case provided. • Usage, application, or withdrawal of company funds for non-business activity; this is a major offense known as misfeasance, and the directors are held liable. • Entering into a personal guarantee with any stakeholder in the company and then later breaching its' terms.
Bosch, H. (2013). Shareholders' rights. Melbourne, Vic.: Information Australia.
CHAKRABARTY, B., CHAND, P., & ROY, A. (2012). Public administration in a globalizing world: theories and practices. Thousand Oaks, Calif, Sage Publications.
DAS, T. K. (2011). Strategic alliances in a globalizing world. Charlotte, N.C., Information Age Pub.
FERGUSON, Y. H., & JONES, R. J. B. (2002). Political space: frontiers of change and governance in a globalizing world. Albany, State University of New York Press.
KIRTON, J. J. (2013). G20 governance for a globalized world. Farnham, Surrey, Ashgate.
LÉAUTIER, F. (2006). Cities in a globalizing world: governance, performance, and sustainability. Washington, DC, World Bank.
OATLEY, T. H., & WINECOFF, W. K. (2014). Handbook of the international political economy of monetary relations. http://public.eblib.com/choice/publicfullrecord.aspx?p=1718221.
ROBERTSON, S. L. (2012). Public private partnerships in education: new actors and modes of governance in a globalizing world. Cheltenham, UK, Edward Elgar.