ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
Orion Ltd's board meets and appoints Dana as a director in accordance with its constitution. No notification is made to the company registry, and Dana's name is not on the public record. Dana signs a supply contract with Vexa Ltd, which has never checked the registry. Which statement is most accurate?
Dana is validly appointed because the board followed the constitution. Failure to notify the registry is a filing breach that can attract penalties, but it does not invalidate her appointment or automatically make the contract with Vexa Ltd void.
- ADana is validly appointed as between the company and its board, and the failure to notify the registry is a compliance breach rather than the cause of invalidityCorrect
- BDana is not a director until the registry is notified, so the contract is void
- CDana is validly appointed only if Vexa Ltd consents
- DDana's appointment is voidable at the option of any shareholder
Explanation
Appointment takes effect by compliance with the constitution, not by registration. Failure to file exposes the company and officers to penalties and may affect what third parties can be taken to know, but it does not undo the appointment. Option B wrongly treats registration as the source of status.
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