If a company director issues a share propectus which includes the phrase"Directors contribute their time voluntarily" and later awards himself free shares in the company has he committed an offence?If so what is it called and what remedy do the shareholders have?
System of Law: England-and-Wales
Thank you for your question. It is unlikely that he has committed an offence but it is a little unusual for a director to be able to award himself shares. It does depend on the articles of the company but if the shares are in public ownership which is normally the case when a prospectus is issued then one would expect shareholder approval of allotments to the directors. If the director is the sole director and acting in his own interest then it is open to minority shareholders to bring a petition to court and the court has wide powers to interfere if the company is being run to the detriment of shareholders .
30 years experience in business law and related topics such as employment law
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