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CMA Final · Corporate and Economic Laws · Board Meetings and Procedures

Of the 9 directors of Meridian Foods Ltd. (no vacancies), 6 are interested directors in a matter under section 184(2). Under section 174(3), what is the quorum while this position continues?

The quorum is two directors who are not interested directors and are present at the meeting. Since six of nine directors are interested, they equal two-thirds of the Board, so section 174(3) displaces the usual one-third rule and requires at least two non-interested directors.

  1. AThree directors, whether interested or not
  2. BTwo directors who are not interested directors and are present at the meetingCorrect
  3. CFour directors in all
  4. DThree directors who are not interested directors

Explanation

Interested directors (6) are at least two-thirds of the total strength of 9 (two-thirds is 6). So section 174(3) applies, and the quorum is the non-interested directors present, being not less than two. The ordinary one-third rule giving 3 does not apply during this time.

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