What to investigate and how: Directors remuneration: What if the assent principle does not apply?
If there are more shareholders, or perhaps a dispute between shareholders, the Duomatic principle (see INS44205) may not apply because all the shareholders would not have agreed to the remuneration if they had held a meeting. In that case, payment of the remuneration will be outside the powers of the company. However, that does not always mean the directors will have to refund it to the company. If the directors have performed a service for the company, then they are entitled to be remunerated for that service on a ‘quantum meruit’ basis (‘as much as it is worth’). This means they are entitled to be paid a market rate for their services as director, manager or employee ( Craven-Ellis v Canons Limited [1936] 2 KB403). Furthermore, the assent principle will clearly not apply where there is an express provision in the company’s memorandum and articles amending Article 82, Table A, Companies Act 1985 (see INS44200 for the importance of Article 82). This amended article might provide for sp
