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

Lumen Ltd's articles require the shareholders to vote on each director individually. At a general meeting, a single resolution proposes to appoint Ana, Ben and Chen together as directors. All three are approved. What is the most likely consequence under the rule on appointing directors?

The appointments are likely invalid or open to challenge. The articles require a separate vote on each director, so a single block resolution fails to follow the constitution, and majority approval or the chair's declaration cannot cure that defect.

  1. AThe appointments are likely invalid or open to challenge because the constitution requires individual votesCorrect
  2. BThe appointments are valid because a majority approved the group
  3. CThe appointments are valid if the chair declares the motion passed
  4. DThe appointments are valid because directors are always appointed by the board

Explanation

Where the constitution requires separate resolutions, a single block resolution does not follow the required procedure and is open to challenge. A majority in favour does not cure the procedural defect. Option C is wrong because the chair cannot override the constitution.

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