Duty to act in good faith in the best interest of the company as a whole- Broad duty that focuses on good faith and whether or not they are acting honestly. We look at company and shareholders collectively. We've also seen there is protection for creditors and employees in certain circumstances. We generally focus on the company.

How did this operate relating to corporate groups? Must remember principle of separate legal personality. A company is separate from other members in a group of companies. When you apply this, what you end up with is that directors owe duty to act in best interest of particular company

Test comes out of Charterbridge case (where they take a decision that may be taken to benefit another company in the group) is whether a reasonable person could have reasonably believed that the benefit is for the best interest of the company they were director of. The exception applies in relation to wholly owned subsidiaries, if not wholly owned you have minority shareholders that would be disadvantaged s187

	Created by Nafisa Zahra about 10 years ago

University Law of Business Entities Note on LBE week 7, created by Nafisa Zahra on 03/04/2014.

LBE week 7