Issue link: https://htpgraphics.uberflip.com/i/116729
Shareholders and Directors Section 4 You may well have a dual role in the company as both a shareholder and a director. Role of the Shareholder Ultimate control of the company lies with the shareholders with their ability to appoint and remove directors. (There is a special procedure whereby the shareholders can vote to remove a director from office). However the vast majority of powers relating to the day to day running of the business lies with the directors. As a shareholder in a private limited company, your liability is limited to the amount, if any, which remains unpaid on your shares. However, commercially speaking,as a shareholder you may not be able totally to avoid liability in other ways. You may, for example, be required by lenders to guarantee personally any borrowings by the company. If you are asked to do this by a funderor supplier or any other third party, you should of course be extremely wary and take professional advice. Any agreement to give such a guarantee will mean that your own personal assets will be at risk if the guarantee is ever called. Powers of the Shareholders Shareholders' powers are effectively exercised by the shareholders through the passing of ordinary and special resolutions. Main powers n to vote in general meetings of the company n to change the Articles of Association of the company (the Articles govern how the company is run internally and set out the rights which attach to the shares) n to change the share capital of the company n to authorise the directors to allot shares in the company to new or existing members n to elect new directors and remove existing directors. 19