Exercise their power to appoint directors bona fide

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exercise their power to appoint directors bona fide and in the interest of the company and not for ulterior purposes. A person appointed a director must consent to act as such; otherwise, the appointment will not be valid. Vacancies in the board of directors due to the death, retirement, resignation, dismissal, or disqualification of directors may be filled by the board on a casual or interim basis – s . 168 CA 2006 . However, in filling the vacancy, the directors must not exceed the maximum number of directors stipulated by the members in the articles or otherwise. A director appointed to fill a casual vacancy remains in office only until the next AGM when he must quit unless re-elected by the members. 24.5.1 DIRECTORS’ SERVICE CONTRACTS Under s. 188 CA 2006, the shareholders of a company must approve any director’s contract guaranteed for up to two years. This provision makes it less expensive for shareholders to remove erring directors from office and ensures greater shareholder influence in the management of their companies. Directors’ service contract, include contracts of service, contracts for service, and letters of appointment – s. 227 CA 2006. A copy of directors’ service contract or a memorandum of the contract (where the contract is not in writing) must be kept available for inspection at the company’s registered office (or such other place as specified by the Secretary of State) – s. 228. If a director’s service contract is made in contravention of this provision, the company may terminate it at any time by giving a reasonable notice – s. 189 CA 2006. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY COMPANY DIRECTORS 429 24.5.2 NUMBER AND REGISTER OF DIRECTORS A private company may have only one director, while a public company must have at least two – s. 154 CA 2006 . Usually, however, a company’s articles stipulate the number of directors the company will have (subject to the statutory minimum). Despite the number, all companies must have at least one director who is a natural person. Thus, where a private company has only one director, that director must be a human being – s. 155 CA 2006 (for the purposes of this section, a corporation sole is regarded as a natural person). The Secretary of State may give an order to a company to comply with the above provisions, and it is an offence for a company not to do so – s. 156 CA 2006. Where a company has less than the minimum prescribed number of directors, the rest should not act unless the articles permit them to do so. Every company must keep a register of all its directors, their particulars, and residential address at its registered office (or such place as may be designated by the Secretary of State). The register must be open for inspection to members of the company and the public – s. 163, 164 & 165 CA 2006.
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