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CMA Final · Corporate and Economic Laws · Board of Directors and Key Managerial Personnel

The sole whole-time Chief Financial Officer of Sapphire Textiles Ltd. resigns, leaving the office vacant on 1 March. By when must the Board fill the vacancy under Section 203?

The Board must fill the vacancy at a Board meeting within six months from the date the office fell vacant. Section 203(4) places this duty on the Board itself, not on the shareholders, and the period is six months rather than three months or a year.

  1. AWithin three months from the date of vacancy
  2. BWithin six months from the date of vacancy, at a Board meetingCorrect
  3. CWithin six months, by a resolution of members in general meeting
  4. DWithin one year from the date of vacancy

Explanation

Section 203(4) says a vacancy in the office of any whole-time KMP must be filled by the Board at a meeting of the Board within six months from the date of vacancy. Option three is wrong because the Board, not members, fills it.

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