Where is the legal responsibility to maximise shareholder value stated in UK company law? I can not find where in the model articles for UK companies it says the responsibility of the directors is to maximise shareholder value. https://www.gov.uk/government/publications/model-articles-for-private-companies-limited-by-shares/model-articles-for-private-companies-limited-by-shares#noright Is this stated somewhere else, perhaps the Company Act 2006? https://www.legislation.gov.uk/ukpga/2006/46/contents
Sections 170 and 172 of the Companies Act (2006) cited in the original question, are most relevant. Section 170(3) and (4) provides that the Companies Act (2006) restates the common law and equity case law of the United Kingdom regarding the duties of directors and should be interpreted in that fashion, rather than as effecting a substantive change in the law established by those hundreds of years of cases. This caselaw has repeatedly clarified for hundreds of years that it is the job of the directors to look out for the interests of the shareholders who collectively elect them first, before any other consideration. Section 172(1) states that a "director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard to (among other matters) to . . ." In the Companies Act (2006) the term "members" is the term used to refer to shareholders. (For what it is worth, I think that one of many reasons for the stylistic decision to use the term "members" rather than "shareholders" in the statutory language is probably to insure that the somewhat crass and very quotable phase "maximise shareholder value" doesn't actually appear in the language of the statute.) But, the balance of Section 172(1) qualifies the first part of the sentence set forth above by identifying considerations in addition to the short term benefit of shareholders that may also be considered. (1)(a) notes that the long term as well as the short term may be considered, (1)(b) authorizes directors to also consider the interests of employees of the company, (1)(c) authorizes directors to also consider relations with persons with whom the corporation has contracts, (1)(d) authorizes directors to consider the impact on the community and the environment, (1)(e) authorizes directors to consider the reputation of the company, and (1)(f) authorizes directors to consider what is fair when shareholders have potentially conflicting interests. Section 172(2) states that in a public benefit corporation that has a formally stated purposes other than benefitting shareholders that this purpose rather than benefitting shareholders should control. Section 172(3) alludes to the fact that when a company is insolvent it has a duty to elevate its duties to creditors over the duties of shareholders (i.e. "members"). Section 172(1) is really an embrace of an oxymoron. The first clause succinctly states the theory that directors have a primary duty to act in the interests of the shareholders. The second clause, however, largely adopts a different theory of what a corporation is called the "web of contracts theory" which states that corporations mediate the interests of everyone they do business with, that the shareholders are just one of those groups of constituents, and that directors should look to the interests of the entity as a whole, rather than to the interests of only one specific group of constituents, the shareholders, while deciding what to do. Linguistically, the way that Section 172(1) reconciles these opposing theories of the purpose of a corporation which a director is to carry out is to suggest that the duties of a director to act in the best interests of "its members as a whole" (to whom the directors owe primary allegiance) is not inconsistent with considering the interests of other constituents of the company. Implicitly, this sentence construction is implying that looking out for everyone and making sure that everyone is happy is frequently a good way, in the long term, to advance the interests of "its members as a whole" by making the company more profitable since it has no enemies. Put another way, while 172(1) says that when push comes to shove the interests of the shareholders is the primary duty of the directors to advance, that directors are urged by the statute to seriously consider that business is not a zero sum game and that fair dealing with others is ultimate a good policy for long term profitability of shareholders. The focus on the long term in Section 172(1)(a) is the way that this approach is justified even in the face of a short term decision like whether to increase employee pay or use available funds to pay dividends to shareholders, that pits one against the other. Section 172(1)(a) says that even though paying employees more in the short run may reduce the amount of dividends that can be paid to shareholders, that winning employee loyalty might, for example, increase productivity which increases profits, which increases the long term capacity of the corporation to pay dividends to shareholders, so a short term crimp in dividend payments can still be in the best interests of shareholders in the long term. The second clause of 172(1)(a), however, is strongly undermined by Sections 170(3) and (4), which have historically developed a case law in which, the primacy of a director's duty to shareholders has been made clear, even though the case law does not absolutely and categorically rule out the possibility that other considerations could be in the best interests of the shareholders if one looks at the situation from a broad enough perspective. The "Model articles for private companies limited by shares" says nothing at all about the duties of directors. This document is a document that explains how directors go about accomplishing the duties that all directors of corporations have by operation of law in this particular company, not what the directors are supposed to do. It is a set of rules for running meeting and making decisions, not a set of missions and duties.
You don’t need a company to run a business As an individual (sole-trader) you can operate a business, hire employees and contractors and do everything else a business does. The purpose of a company is to separate and protect your personal assets from your business assets. As a sole-trader you are personally responsible for all the liabilities of the business - if it goes bust, you go bust. If the business is operated by a company, then, providing you and the company follow the law, your personal assets are not at risk if the company becomes insolvent.
Nothing is going to explicitly say that this is authorized — it's allowed because it isn't forbidden by any of the following: The Dodd-Frank Act Sarbanes-Oxley The Securities Exchange Act (1934) The SEC rules The specific NASDAQ listing standards NASDAQ (and NYSE) has requirements for independent directors and committees (from outside of management), but it doesn't forbid a person from serving on multiple boards of directors of listed companies, as chairperson or otherwise. If the companies are competitors or have trade secrets they need to keep from each other, etc, then the conflict of interest could prevent serving on both boards.
Companies have a registry of their shareholders. Anyone with at least one share registered in their name is a shareholder of record. However, the vast majority of people who consider themselves &quot;shareholders&quot; aren't actually registered owners of a stock. Instead, almost all public stock in the US is held &quot;in street name.&quot; That means that the stock is formally held in the name of a brokerage. What an individual has is &quot;beneficial ownership:&quot; the brokerage passes dividends on to the beneficial owner, will vote how the beneficial owner tells it to vote, and requires agreement from the beneficial owner before it can sell the stock. To make stuff even more complicated, the broker itself generally holds the stock in street name. Almost all public stock in the US is really owned by the Depository Trust Corporation in the name of Cede and Company (a general partnership of a few DTC officers). The reason public stock is mostly held in street name is efficiency. Transferring the legal owner of a piece of stock is a nontrivial process; until recently, it involved physically shipping stock certificates to the new owner. Even now that stock ownership can typically be transferred electronically, it's much easier to tell Cede &amp; Co. &quot;the new beneficial owner is this person.&quot; Because beneficial ownership is just a contract, you can skip all the formalities of updating the company's official register of shareholders.
You are deeply confused, probably by the blogs of a conspiracy theorist (perhaps discussing the Sovereign Citizen Movement mentioned in the comments), whom it would be helpful for you to reference. In fact, people with and without lawyers claim common law rights in the ordinary courts of the UK every day, in the lion's share of civil lawsuits. For example: There is a common law right to sue for damages when someone breaches a contract by not paying a bill that they owe. A defendant, meanwhile, has a common law right to defend against such a suit on grounds, for example, that the debt has been paid or that the debt is not owed because there was no agreement to pay in the first place. The substantive right of an owner of real property to evict a tenant who breaches a lease arises at common law, even though statutes spell out the process for enforcing that right. Furthermore, the way that ownership of real property is established (i.e. through a chain of title involving purchases by deeds) likewise arises at common law. The defendant meanwhile has a common law defense to a claim for rent for the remainder of the period in a lease after an eviction for failure of the landlord to mitigate damages if the landlord does not make a reasonable effort to find a new tenant. The right to sue someone who negligently caused an accident that injured you is a common law right.
What you quoted does not say "a" director can appoint a director. It says "the directors", plural, can appoint a director. I assume that would be by a vote. Elsewhere in the document it might or might not be made clear if this requires only a majority and/or if this is only in cases to fill a vacancy.
This is neither unusual nor illegal, assuming that the buyback price is specified in the agreement. If your friend does not wish to take advantage of the "nice discount" he can decline the deal, and decide for himself whether he wishes to buy shares without restriction, at the market rate. (It would be interesting to know what happens if he sells his shares and then leaves the company. I am fairly sure the agreement will cover this, but requiring an ex-employee to buy shares and then give them to the company could be considered unconscionable. That might be worth asking a lawyer about).
If the employee has the choice - bonus and membership, or no bonus - then I expect the offer to be legal. Since it is a real bonus and part of your salary you will have to pay income tax on it. What might be illegal, but not your concern, is if your company tells investors how well the company is doing, and how well the membership scheme is doing, when in reality 80% of members are employees paying effectively nothing.