Hi Margaret,Originally Posted by MargC
I think the point being made is that there is a difference between a limited company as loosely quoted in this thread, and a company limited by guarantee, in the case of the FRA of its members. As previously posted, I am a committee member of another company limited by guarantee. Just as in that organisation, ALL of us constitute the FRA, and the focus of the committee is on serving its members. The particular section of the Companies Act doesn't offer any other objective, e.g. profits must be retained and cannot be distributed. There have been some suggestions that the committee turned the FRA into a company limited by guarantee for their own personal protection to the exclusion of other members, which I consider unjustifiable given the above.
The main improvement is that a committee member can enter into a commercial contract on behalf of the company as an official rather than a personally liable individual. This is entirely separate to any laws regarding criminal negligence, or civil claims for damages. The insurance policy, which covers my activities is very clear; if I am found to have broken the law, I am on my own i.e. personally liable just as before. Equally I cannot put the members of the company at a disadvantage; in this context, expose RO to the law as a result of my actions. I would also suggest that any rules/requirements would be inadmissible in a criminal prosecution; it would be judged against statute. A civil claim is a different matter.
In my experience this formal arrangement under the Companies Act 2006 is far better than what went before; it focusses the decision making. The constant theme of my management committee meetings is, are we doing the best by our members as defined by the Articles of Association, are we acting within what the law requires of us? The current processes regarding the change in FRA rules and requirements seem to include all the expected steps; consultation, professional advice and so on. Add in the Cumbria Coroners legal obligations and the necessary FRA response, and it is a complex mix.
