ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
Tandem plc's constitution allows the board to fill casual vacancies. Director Hale dies during the year. The remaining directors immediately appoint Rosa to replace him. Shareholders later complain that they did not vote on Rosa. What is the most likely legal position?
The appointment is valid because the constitution expressly authorises the board to fill vacancies. Shareholders may have to confirm Rosa at the next general meeting if the constitution requires it, but the board's power to appoint does not depend on a prior shareholder vote.
- AThe appointment is valid because the constitution gives the board power to fill vacancies, though Rosa may need to be confirmed by shareholders at the next meeting if the constitution requires itCorrect
- BThe appointment is void because only shareholders can ever appoint directors
- CThe appointment is valid only if the court approves it
- DThe appointment is valid only if the company's auditor consents to it
Explanation
The constitution is the source of the board's power to appoint, so the appointment is valid. Many constitutions require confirmation at the next general meeting, which is the only further step. Option B is wrong because the board may be given appointment powers by the constitution.
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