• Section 9: Section 9: Directors and Secretary

    • Article 52 - Appointment of directors

      (1) An LLC shall have at least one director.
      (2) No person shall be a director who:
      (A) if an individual, is under the age of 18 years;
      (B) is disqualified from being a director in the QFC or in any other place;
      (C) is an undischarged bankrupt in any country; or
      (D) is a Body Corporate, unless—
      (i) the Body Corporate is an Authorised Firm; and
      (ii) the LLC is a Collective Investment Fund.
      (3) The first directors of an LLC shall be those named in the incorporation document and thereafter the directors, subject to the provisions of these Regulations and any other Regulations, shall be appointed and removed and shall hold and vacate office as provided in the articles of association of the LLC.
      (4) The particulars of each director appointed, removed or who resigns and any change in the particulars of the directors of an LLC from time to time, shall be registered with the CRO in the Prescribed Form and no later than 21 days after such change, together with payment of any Prescribed Fee. For each director appointed these particulars shall include his Name, date of birth, Address, nationality, business occupation, any directorships held by him or which have been held by him within the last 5 years and shall be accompanied by or include a written declaration signed by the director that he is qualified to act as a director pursuant to these Regulations.
      (5) The articles of association of an LLC may provide for a director to appoint an alternate to attend meetings in the absence of the director who appointed him and to vote in his place.
      Amended (as from 5th April 2015).

    • Article 53 - Removal of directors

      (1) Notwithstanding anything in its articles of association or in any agreement between the LLC and the director and without prejudice to any other power to remove a director which may exist apart from this Article 53, an LLC may by Ordinary Resolution at a general meeting remove a director before the expiration of his period of office, provided that notice of any such meeting shall be served on the director concerned not less than 21 days before the meeting and such director shall be entitled to be heard at such meeting.
      (2) The removal of a director from office by resolution of the Members of the LLC under Article 53(1) shall be without prejudice to any rights of that director to compensation or damages in respect of the termination of his appointment as director.

    • Article 54 - Powers of directors

      The directors of an LLC may collectively exercise all powers of the LLC in accordance with its articles of association, save to the extent that these Regulations or any other Regulations or any rules made by the QFC Authority or the LLC's articles of association require any such powers to be exercised by the Members of the LLC.

    • Article 55 - Duties of directors

      (1) A director of an LLC owes a duty to the LLC to comply with the following provisions of this Article and shall, unless his failure to comply with any such duty shall be approved or ratified by an Ordinary Resolution of the LLC, be liable to compensate the LLC for any loss suffered by the LLC and to account to the LLC for any profit, gain or benefit obtained by the director in consequence of any such failure.
      (2) A director shall:
      (A) act honestly and in good faith with a view to the best interests of the LLC;
      (B) act in accordance with the articles of association of the LLC and decisions of the LLC taken in accordance with these Regulations and the articles of association and not delegate any of his powers or fail to exercise his independent judgement in relation to any exercise of his powers, except where authorised by these Regulations or the articles of association or any such decisions;
      (C) exercise the care, diligence and skill that a reasonably prudent person with the knowledge, skill and experience which may reasonably be expected of a director in his position and any additional knowledge, skill and experience which he has would exercise in comparable circumstances;
      (D) not use for his own or anyone else's benefit any property or information of the LLC or any opportunity of the LLC of which he become aware in the performance of his functions as a director; and
      (E) not accept any benefit from a third party which is conferred because of his position as a director or by reason of his doing or not doing anything as a director, unless the benefit is incidental to the proper performance of his functions as a director or there is no real possibility of the benefit resulting in a conflict of interest on the part of the director.

    • Article 56 - Directors' interests

      (1) A director of an LLC who has a direct or indirect interest of which he is aware in a transaction entered into or proposed to be entered into by an LLC or by a Subsidiary of the LLC, shall disclose to the directors of the LLC the nature and extent of his interest.
      (2) The disclosure required under Article 56(1) shall be made as soon as practicable but no later than 10 days after the director becomes aware of the circumstances from which his duty to make the disclosure arises.
      (3) An interest solely through a holding of less than 10 percent of the shares in a Body Corporate listed on any stock exchange shall not constitute an interest requiring disclosure under this Article 56.
      (4) A notice in writing given to the LLC by a director (including a sole director) that he is to be regarded as interested in any transaction with a specified person and specifying the reason why he is to be regarded as so interested is sufficient disclosure of his interest in any such transaction entered into after the notice is given.
      (5) Where a director fails to disclose an interest of his under this Article 56 the director shall, unless the transaction is confirmed by an Ordinary Resolution at a general meeting of the LLC at which the nature of the director's interest in the transaction was properly disclosed, be liable to account to the LLC for any profit, gain or benefit obtained by the director in connection with the transaction.
      (6) A sole director of an LLC who is required by this Article 56 to disclose any interest shall record the nature and extent of his interest in writing in a register which shall be kept at the LLC's registered office and shall be made available there for inspection by any Member and the LLC's auditor without charge during the office hours of the LLC.
      Amended (as from 5th April 2015).

    • Article 57 - Prohibition of financial assistance to directors

      (1) Without the consent of any Member or Members holding in the aggregate not less than 90 percent of the total voting rights of all the Members having the right to vote at any meeting of the Members it shall not be lawful for an LLC to make a loan or similar form of financial assistance to any person who is its director or a director of its Holding Company, or to enter into any guarantee or provide security in connection with any financial assistance made to such person as aforesaid by any other person provided that nothing in this Article 57 shall apply to either:
      (A) subject to Article 57(2) to anything done to provide any such person as aforesaid with funds to meet expenditure incurred or to be incurred by him for the purposes of the LLC or for the purpose of enabling him properly to perform his duties as an Officer of the LLC;
      (B) in the case of an LLC whose ordinary Business includes the lending of money or the giving of guarantees in connection with financial assistances made by other persons, to anything done by the LLC in the ordinary course of that Business; or
      (C) any financial assistance prescribed in rules made by the QFC Authority.
      (2) The proviso stated at Article 57(1)(A) shall not authorise the making of any financial assistance, or the entering into of any guarantee, or the provision of any security, except either:
      (A) with the prior agreement of the LLC given at a general meeting at which the purposes of the expenditure and the amount of the financial assistance or the extent of the guarantee or security, as the case may be, are disclosed; or
      (B) on condition that, if the approval of the LLC is not given as aforesaid at or before the next following annual general meeting, the financial assistance shall be repaid or the liability under the guarantee or security shall be discharged, as the case may be, within 6 months from the conclusion of that meeting.
      (3) Where the approval of the LLC is not given as required by any such condition, the directors authorising the making of the financial assistance, or entering into the guarantee, or the provision of security, shall be jointly and severally liable to indemnify the LLC against any loss arising therefrom.
      (4) For the purposes of this Article 57 a financial assistance shall not be deemed to have been made in the ordinary course of Business of an LLC if it has not been made on normal commercial terms including in respect of interest rates, repayment terms and security.
      (5) Financial assistance shall be deemed to be financial assistance to a director if it is made to or in favour of:
      (A) a spouse or child of a director; or
      (B) a Body Corporate of which a director or his spouse or child (or any of them together) owns or controls directly or indirectly more than 20 percent of the share capital.
      Amended (as from 5th April 2015).

    • Article 58 - Payment to directors for loss of office

      (1) It is not lawful for an LLC to make to a director of the LLC any payment by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, without particulars of the proposed payment (including its amount) being disclosed to Members of the LLC and the proposal being approved by Ordinary Resolution. This Article 58 does not affect the ability of an LLC to pay compensation to a director in connection with the termination of his employment by the LLC.
      (2) Where a payment which is unlawful under this Article 58 is made to a director, he shall be liable to repay it to the LLC, unless and until the provisions of this Article are subsequently complied with.

    • Article 59 - Validity of acts of director

      The acts of a director are valid notwithstanding any defect that may afterwards be found in his appointment or qualification.

    • Article 60 - Appointment of secretary

      (1) Every LLC shall have at all times an appropriately qualified secretary.
      (2) The first secretary of an LLC shall be the person named in the incorporation document, and after that shall be any person appointed by the directors, including one of their number (except that a sole director cannot also be a secretary). A secretary may be removed by the directors of an LLC or may resign by the submission of a letter of resignation.
      (3) The particulars of each secretary appointed, removed or who resigns and any change in the particulars of the secretary of an LLC from time to time, shall be registered with the CRO in the Prescribed Form, together with payment of the Prescribed Fee, and within 21 days of such change. For each secretary appointed these particulars shall include his Name, date of birth, Address and nationality and in the case of a Body Corporate its name, registered number and registered office address.
      Amended (as from 5th April 2015).

    • Article 61 - Exemption, indemnification and liability of Officers

      (1) Subject to Article 61(2), an LLC may in its articles of association or in any contract or arrangement between the LLC and any Officer, or any person employed by the LLC as auditor, exempt such Officer or person from, or indemnify him in respect of any negligence, default, breach of duty or breach of trust of which the Officer or person may be guilty in relation to the LLC or any Subsidiary thereof.
      (2) Any provision whether contained in the articles of association of the LLC or in any contract or arrangement between the LLC and any Officer, or any person employed by the LLC as auditor, exempting such Officer or person from, or indemnifying him against any liability which by virtue of any rule of law would otherwise attach to him in respect of any fraud or dishonesty of which he may be guilty in relation to the LLC shall be void provided that, notwithstanding anything in this Article 61 an LLC may, in pursuance of any such provision as aforesaid, indemnify any such Officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgement is given in his favour or in which he is acquitted.

    • Article 62 - Insurance of Officers

      An LLC may purchase and maintain insurance for the benefit of any Officer of the LLC against any liability incurred by him in his capacity as an Officer of the LLC or indemnifying such an Officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Officer may be guilty in relation to the LLC or any Subsidiary thereof and nothing in these Regulations shall make any such policy void or voidable.