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

Orla is appointed a director of Brightwell Ltd by the board. The company's registered records are not updated for several weeks, though Orla has agreed to act and the board has told the members. Which is the correct view of when Orla's appointment takes effect?

Orla's appointment is generally effective once it is validly made under the articles and she accepts the role. The company then has a separate duty to notify the registrar within the required time, but registration or publication does not itself create the appointment.

  1. AIt takes effect only when the registrar publishes the change
  2. BIt takes effect only once the next annual general meeting ratifies it
  3. CIt generally takes effect when validly made under the articles and accepted, and the company must then notify the registrar within the required periodCorrect
  4. DIt never takes effect unless Orla buys shares in the company

Explanation

Appointment is effective when made in accordance with the articles and accepted by the individual. Notifying the registrar is a separate statutory duty and does not decide validity. No share qualification applies unless the articles impose one, and none is stated here.

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