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Review Your SQE 1 Practice Records

Examination Timing: 00H00M44S

Green Garden Ltd. is managed by Amanda and Tom, who are both directors. The shareholders are Elizabeth and Michael, each owning 50% of the shares. Michael sells half of his shares to Amanda and then passes away. 


Who is now responsible for running the business? 

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The directors of a company are legally responsible for its management. The death of a shareholder does not alter the directors' responsibilities. Unless the company's articles of association state otherwise, the fact that a director is also a shareholder does not give them any greater authority within the company than any other director. In this scenario, Amanda and Tom remain responsible for running the business as they are the directors. 


Key Point: Under the Companies Act 2006, the management of a company is the responsibility of its directors, regardless of any changes in the shareholders' circumstances. The law ensures that directors maintain consistent control over the company's operations, thereby providing stability and continuity in corporate governance.

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