SECRETARIAL PRACTICE 
of intention to propose any candidate other than one recom 
mended by the board must be given to the company. The 
powers of the directors should be specified, and, in most cases, 
ample powers of delegation given. Proceedings at board 
meetings may be fully regulated. 
It is usual to insert a provision empowering a director to 
contract with the company, but any such provision must be 
subject to the restriction that he must declare his interest 
[s. 149] and is usually subject to the further restriction that 
he may not vote in respect of such contract. A directors’ 
indemnity clause against liabilities incurred in the conduct 
of the company’s business, other than liabilities due to the 
directors’ wilful act or default, was often inserted and was 
effective (see hereon re City Equitable Fire Insurance Co. Lid. 
(1925) 1 Ch. 407). Under s. 152 of the Act of 1929, however, 
(1) the provisions of such a clause are made void except that 
provisions in force at the commencement of the Act will remain 
effective for six months from that date, (2) any transaction in 
force is protected for a period of six months, and (3) the 
company may under any such provision indemnify any 
director, manager, officer, or auditor against any liability 
incurred by him in the successful defence of any civil or 
criminal proceedings, or in connection with any successful 
application to the Court under s. 372 for relief from liability for 
negligence, default or breach of trust or duty. A provision 
should, therefore, still be inserted limited to such indemnity 
as is authorised by the third exception mentioned above. 
Provisions as to accounts and audit are, in practice, usually 
inserted as a reminder of the provisions of the statutory law 
(ss. 122, ef seq.). Express provision should be made, except 
in the case of a private company, to give effect to the statutory 
obligation to send a copy of the balance sheet and all docu- 
ments required by the Act to be annexed thereto to each 
shareholder (s. 130). 
It is desirable to give the board power to form a reserve 
fund, subject to whatever special conditions may be advisable 
in each case. Where power is taken to create redeemable 
preference shares (s. 46), special provision should be made 
as to the Capital Redemption Reserve Fund referred to in 
that section. 
Amongst the regulations as to payment of dividends, it 
should be provided that interim dividends may be paid, that 
no larger dividend may be declared than is recommended 
by the board, and that no dividend shall bear interest against 
the company.