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

Zeta Ltd's articles are silent on who may appoint directors. At a general meeting, the shareholders want to add a new director, Mr Ito, to the board. Under the general company law rules in the LW Global syllabus, how may Mr Ito normally be appointed?

Mr Ito can normally be appointed by an ordinary resolution of the members at a general meeting. Members hold the power to appoint directors, and a simple majority suffices unless the articles state otherwise. The secretary and auditor have no power to appoint, and a special resolution is unnecessary.

  1. ABy an ordinary resolution of the members passed at a general meetingCorrect
  2. BOnly by the company secretary signing a notice of appointment
  3. COnly by a special resolution requiring 75% approval
  4. DOnly by the company's external auditor approving the appointment

Explanation

Members are the ultimate source of power to appoint directors and may do so by ordinary resolution (more than 50% of votes cast) unless the articles require something else. A special resolution is not required for a normal appointment. The secretary and auditor have no appointing power.

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