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

Zephyr Ltd is being incorporated in a jurisdiction that follows the Global variant company law rules. The founders wish to know who normally has the power to appoint the first directors of a new company. Which of the following is correct?

The first directors are normally those named in the incorporation documents filed with the registrar, or appointed by the subscribers. The registrar merely registers them and auditors do not appoint directors, so the founders decide who the first directors will be.

  1. AThe first directors are those named in the incorporation documents filed with the registrar, or otherwise appointed by the subscribersCorrect
  2. BThe first directors must be appointed by the registrar after incorporation
  3. CThe first directors must be elected by the company's external auditors

Explanation

On formation, the first directors are typically named in the documents delivered to the registrar or appointed by the subscribers. The registrar only records the appointment and does not choose directors. Auditors have no role in appointing directors.

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