ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
The articles of Brelmont Ltd allow the existing board to appoint a person to fill a casual vacancy until the next annual general meeting. A director, Aisha, dies in March. The board appoints Tomas to replace her. Which statement is correct?
The appointment is valid because the articles authorise the board to fill casual vacancies. Tomas holds office only until the next annual general meeting, when the members can confirm him or not. The board's power is limited by the terms of the articles.
- AThe appointment is invalid because only members may ever appoint directors
- BThe appointment is valid, because the articles give the board this power, and Tomas holds office until the next annual general meetingCorrect
- CThe appointment is valid and Tomas may remain a director permanently without any member approval
Explanation
Where the articles give the board power to fill vacancies, an appointment made under that power is valid. Here the articles limit the term to the next annual general meeting, when members can confirm or remove him. Option 0 ignores the articles; option 2 ignores the stated limit.
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