ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
Alpha Ltd's articles are silent on who may appoint directors. At a general meeting, the members wish to appoint Mr Rao as a new director. Which statement is correct under the general approach of company law taught in the LW Global syllabus?
The members may appoint Mr Rao by ordinary resolution. Shareholders hold the default power to appoint directors where the articles are silent, and neither the existing directors, the secretary nor the auditor has an inherent power to make the appointment.
- AThe members may appoint Mr Rao by passing an ordinary resolutionCorrect
- BOnly the existing directors may appoint Mr Rao
- COnly the company secretary may appoint Mr Rao
- DMr Rao may only be appointed by the company's auditor
Explanation
Members, as the owners of the company, can appoint directors by ordinary resolution unless the constitution provides otherwise. Directors and secretaries have no inherent power to appoint a director where the articles are silent, and an auditor has no role in appointments.
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