General duties of a company manager
In general terms, a company manager is expected to run the company's day-to-day affairs within the authority given by the memorandum of association and by any decisions the shareholders have taken. This typically means acting for the benefit of the company rather than for a manager's personal benefit, and referring decisions that go beyond the manager's authority back to the shareholders.
Good record-keeping — of decisions, contracts, and communications with shareholders — is generally expected and can matter significantly if a disagreement later arises about what was authorised and what was not.
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Where disputes commonly arise
Whether a manager acted appropriately in any of these situations depends on the company's memorandum of association, any shareholders' agreement, and the applicable law — it is not something that can be assessed from general principles alone.
- A manager entering into a contract or spending money beyond the authority granted.
- A manager failing to share financial information or updates with shareholders.
- A situation where the manager has a personal interest in a transaction involving the company.
- Disagreement about whether a decision required shareholder approval.
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Practical steps for managers and shareholders
- 1Managers should check the memorandum of association before taking any significant decision.
- 2Keep written records of decisions, approvals and the reasons behind them.
- 3Disclose any personal interest in a transaction to the shareholders promptly.
- 4Shareholders concerned about a manager's conduct should request relevant records in writing.
- 5Where a disagreement arises, consider the company's own documents before assuming a particular outcome.
