ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
Lena is a director of Nova Ltd. The articles say the board may appoint any person willing to act as an additional director, provided total directors do not exceed ten. There are currently ten directors. The board purports to appoint an eleventh, Tomas. What is the effect?
The appointment is invalid. The board's power to appoint directors derives from the articles, which cap the number at ten, so appointing an eleventh exceeds that authority unless the articles are amended first.
- AThe appointment is invalid because it exceeds the maximum permitted by the articlesCorrect
- BThe appointment is valid because the board has general power to appoint
- CThe appointment is valid but Tomas has no voting rights
Explanation
The board's power to appoint comes from the articles and is limited by them. Exceeding the maximum of ten is outside that power, so the appointment is invalid unless the articles are amended or the members act.
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