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ACCA Applied Skills · Corporate and Business Law (Global) · Company meetings and resolutions

Fenwick Co is a company where the law requires an AGM each year. The board forgets to call one for the latest year. At the next general meeting, held three months after the deadline, members approve the accounts and re-elect the directors. Which statement is most accurate?

The late AGM is a breach of the duty to hold the meeting on time, which may expose the company and officers to penalties, but resolutions passed at a properly convened later meeting are not void for that reason alone. Strike-off and automatic disqualification do not follow.

  1. AThe resolutions passed at the later meeting are automatically void because only an AGM can approve accounts
  2. BThe company and its officers may be in breach of the duty to hold an AGM, but resolutions properly passed at a validly convened meeting are not void for that reason aloneCorrect
  3. CThe breach means the company must be struck off the register and the directors are immediately disqualified

Explanation

Failing to hold a required AGM by the deadline is a breach by the company and its officers, which may attract penalties or a court or regulator order requiring a meeting. It does not by itself invalidate resolutions passed at a properly convened later meeting, and it does not lead automatically to strike-off or disqualification.

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