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CS Executive · Company Law and Practice · Board Composition and Powers of the Board

Himalaya Foods Ltd's articles require a particular matter to be decided by the company in general meeting. The Board, convinced that it is in the company's interest, decides the matter itself. What is the position under section 179(1)?

The Board may not decide the matter. Under the second proviso to section 179(1), the Board cannot exercise any power or do any act that the Act, the memorandum, the articles or otherwise requires the company to exercise in general meeting. Unanimous Board approval does not change this.

  1. AThe Board may do so since it exercises all powers the company is authorised to exercise
  2. BThe Board may do so if all directors vote in favour
  3. CThe Board may not, because it cannot exercise any power required to be exercised by the company in general meetingCorrect
  4. DThe Board may do so if it informs members at the next meeting

Explanation

The second proviso to section 179(1) bars the Board from exercising any power or doing any act that is required, under the Act, the memorandum or articles or otherwise, to be done by the company in general meeting. Unanimity or later intimation does not cure the lack of power.

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