COMPANY LAW

Company Law

Company Law

Introduction

UK is one of the first countries that established rules for companies. Registration of British companies to create a model was introduced in 1844 August 7, 1862 norms of corporate law have been codified into a single Companies Act (Companies Act). It became the primary source for all future versions of English corporate law. In the future, the Companies Act repeatedly reconsidered, refined, corrected and consolidated. To date, the English legal system, which establishes the legal basis for the creation and management of companies, is an essential part of the regulatory framework governing the conduct of business in the UK (Parkinson, 1995, pp. 64).

The Legal Procedures and Commercial Practices Involved In Setting the Remuneration of the Executive Directors of Public Limited Companies

By decision of the General Meeting of members of the Board of Directors may be paid remuneration and (or) offset by costs associated with the performance of their duties as members of the Board of Directors. The dimensions of remuneration and compensation are established by the general meeting of shareholders. The question of compensation for board members is the most important in the theory of corporate governance and raises a number of problems. First - what should be the reward? If the remuneration of members of the board of directors will be insignificant, they will not have the interest to carry out activities in the community, make decisions, including those associated with the risk for which they are held accountable to the community and shareholders (Sealy & Worthington, 2010, pp. 67). Therefore, society should avoid the election of the board of individuals who are ready to work without remuneration. Moreover, members of the Board of Directors must be large enough so that their interests have been subordinated to the interests of society. In addition, high reward will bring to the board of highly qualified professionals who possess the necessary knowledge and experience.

With respect to the public companies the respective legislature has given more emphasis on procedural requirements enforced on directors in order to deliver the company shareholders the required information in order to assess the rationality and equanimity for the director's remuneration. Unexpectedly, such procedural requirements are nominal when applied to unquoted medium and large sized companied and small sized companies as well (Roach, 2004, pp. 96).

In today's world of globalization, businesses are required to be more competitive for their survival in the market place. In order to remain competitive they had to catch the attention of best talent. Therefore, the companies and their shareholder are pressurized for their competitors who may offer more attractive packages and remuneration levels. A company faces a situation of competitive disadvantage if their remuneration packages of a director do not match with the remuneration package of other companies' director within the same market and same size. The most useful effect of this situation is to relentlessly bring down the assessment of the shareholder of a company as compare to others while considering the remuneration of a ...