Section 9: Section 9: Directors and Secretary
Article 52 - Appointment of directors(1) An
LLCshall 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 QFCor in any other place;(C) is an undischarged bankrupt in any country; or(D) is a Body Corporate, unless—(i) the Body Corporateis an Authorised Firm; and(ii) the LLCis a Collective Investment Fund.(3) The first directors of an LLCshall be those named in the incorporation document and thereafter the directors, subject to the provisions of these Regulationsand 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 LLCfrom time to time, shall be registered with the CROin the Prescribed Formand 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 LLCmay 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
LLCand the director and without prejudice to any other power to remove a director which may exist apart from this Article 53, an LLCmay by Ordinary Resolutionat 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 Membersof the LLCunder 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
LLCmay collectively exercise all powers of the LLCin accordance with its articles of association, save to the extent that these Regulationsor any other Regulationsor any rules made by the QFC Authorityor the LLC'sarticles of association require any such powers to be exercised by the Membersof the LLC.
Article 55 - Duties of directors(1) A director of an
LLCowes a duty to the LLCto 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 Resolutionof the LLC, be liable to compensate the LLCfor any loss suffered by the LLCand to account to the LLCfor 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 LLCand decisions of the LLCtaken in accordance with these Regulationsand 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 Regulationsor 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 LLCor any opportunity of the LLCof 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
LLCwho has a direct or indirect interest of which he is aware in a transaction entered into or proposed to be entered into by an LLCor by a Subsidiaryof the LLC, shall disclose to the directors of the LLCthe 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 Corporatelisted on any stock exchange shall not constitute an interest requiring disclosure under this Article 56.(4) A notice in writing given to the LLCby 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 Resolutionat a general meeting of the LLCat which the nature of the director's interest in the transaction was properly disclosed, be liable to account to the LLCfor any profit, gain or benefit obtained by the director in connection with the transaction.(6) A sole director of an LLCwho 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'sregistered office and shall be made available there for inspection by any Memberand the LLC'sauditor 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
Memberor Membersholding in the aggregate not less than 90 percent of the total voting rights of all the Membershaving the right to vote at any meeting of the Membersit shall not be lawful for an LLCto 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 LLCor for the purpose of enabling him properly to perform his duties as an Officerof the LLC;(B) in the case of an LLCwhose ordinary Businessincludes the lending of money or the giving of guarantees in connection with financial assistances made by other persons, to anything done by the LLCin 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 LLCgiven 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 LLCis 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 LLCis 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 LLCagainst 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 Businessof an LLCif 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 Corporateof 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
LLCto make to a director of the LLCany 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 Membersof the LLCand the proposal being approved by Ordinary Resolution. This Article 58 does not affect the ability of an LLCto 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
LLCshall have at all times an appropriately qualified secretary.(2) The first secretary of an LLCshall 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 LLCor 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 LLCfrom time to time, shall be registered with the CROin 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, Addressand nationality and in the case of a Body Corporateits 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
LLCmay in its articles of association or in any contract or arrangement between the LLCand any Officer, or any person employed by the LLCas auditor, exempt such Officeror person from, or indemnify him in respect of any negligence, default, breach of duty or breach of trust of which the Officeror person may be guilty in relation to the LLCor any Subsidiarythereof.(2) Any provision whether contained in the articles of association of the LLCor in any contract or arrangement between the LLCand any Officer, or any person employed by the LLCas auditor, exempting such Officeror 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 LLCshall be void provided that, notwithstanding anything in this Article 61 an LLCmay, in pursuance of any such provision as aforesaid, indemnify any such Officeror 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
LLCmay purchase and maintain insurance for the benefit of any Officerof the LLCagainst any liability incurred by him in his capacity as an Officerof the LLCor indemnifying such an Officerin 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 Officermay be guilty in relation to the LLCor any Subsidiarythereof and nothing in these Regulationsshall make any such policy void or voidable.