ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
Kavala Ltd's shareholders propose to appoint Selin, an undischarged bankrupt, as a director. The jurisdiction follows the common rule on disqualification of bankrupts. Which statement is correct?
Selin may act as a director only with the court's permission. An undischarged bankrupt who acts without it commits an offence. Shareholder approval cannot override the statutory restriction, and an auditor has no power to grant consent.
- ASelin may act as director only with the court's permission, or she commits an offenceCorrect
- BSelin may act freely, because the shareholders approved her by resolution
- CSelin may act only if the company's auditor consents in writing
Explanation
Under the common rule, an undischarged bankrupt is barred from acting as a director without court permission, and acting without it is an offence. Shareholder approval cannot override this statutory bar. The auditor has no power to consent.
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