ACCA Applied Skills · Corporate and Business Law (Global) · Company directors
Zephyr Ltd's articles are silent on how directors are appointed. The company's first director, Amara, resigns. Under general company law principles in the LW Global syllabus, who would ordinarily have the power to appoint a replacement director by ordinary resolution?
The members in general meeting would ordinarily appoint the replacement director by ordinary resolution. Members are the owners of the company and, unless the articles say otherwise, hold the residual power to appoint directors. Secretaries, auditors and employees have no such inherent power.
- AThe members in general meetingCorrect
- BThe company secretary alone
- CThe company's external auditor
- DThe existing employees by majority vote
Explanation
In the absence of other provisions, the members of a company hold the power to appoint directors, usually by ordinary resolution in general meeting. The company secretary, auditor and employees have no inherent power of appointment.
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