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CS Executive · Company Law and Practice · Board Composition and Powers of the Board

The articles of Sunrise Pharma Ltd are silent on a particular matter, and the Board proposes to act on it. Under section 179(1), which statement about the Board's general power is correct?

The Board may exercise all powers the company is authorised to exercise, but not those that the Act, memorandum or articles require to be exercised in general meeting. Section 179(2) also protects earlier valid Board acts from later regulations, so recording reasons cannot override the reserved powers.

  1. AThe Board may exercise all powers the company is authorised to exercise, except those the Act, memorandum or articles require to be exercised by the company in general meetingCorrect
  2. BThe Board may exercise any power of the company, including those reserved for general meeting, if it records reasons in the minutes
  3. CThe Board may exercise only the powers specifically listed in section 179(3)
  4. DThe Board may exercise all powers of the company, and a regulation made later in general meeting invalidates earlier valid Board acts

Explanation

Section 179(1) entitles the Board to exercise all powers the company is authorised to exercise, subject to the Act, memorandum, articles and regulations, and the second proviso bars it from doing what is required to be done in general meeting. Section 179(2) says a later regulation does not invalidate a prior valid Board act, so the last option is wrong.

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