DIRECTORS DEF: s 4(1) i- officer;

DIRECTORS DEF: s 4(1) i- officer; ii- person occupying the position of director of a corporation by whatever name called; iii- any person in accordance with whose directions or instructions the directors of company are accustomed to act; iv- Alternate or substitute director.

A profession giving advice in his professional capacity – not a shadow director Sec of State for Trade and Industry v Cevrell & Anor D and H – key participants in the senior management of a travel company. They were not directors but purported to act as ostensible consultants to the company. In reality the exercised such control so as to be puppet masters over the management.

The court concluded that to show that they were directors it is necessary to prove that the board accustomed to act in accordance with their instructions. Consent to act as directors Form 48A. See s 123(4) What happen if he failed to comply with s 123(4)? Filling of consent is a statutory requirement. h/ever, failure to comply is merely an irregularity.

It does not invalidate the appointment. To determine whether a person is a director or not depend on what are his powers, duties and functions. Hence, in law a person may not be a director but in fact he is a director – e.g. shadow director

Appointment 1st directors – two directors named in the AOA or AOA.[s 122(3) & s 16(7)] Subsequent directors may be appoint according to the AOA and usually exercisable in a general meeting. Some debentures may contain a clause allowing the debenture holders to appoint a person to be director of company.

AOA may also give power to outsider to appoint directors of a company. If the shareholder is given by the AOA a special power to appoint the director, he can use that power to appoint directors to the company. The AOA may also gives directors to appoint any person to become director of a company. Art 68

Alternate director To help director who cannot perform his duty during the period of his inability. Not part of the statutory minimum of director – not counted as 2. Art 82 Qualification i- S 122 - natural person; principal residence – M’sia ii- s 123, AOA – requires share qualification – must take the shares. Art 71, s 124(1)(3)(4) If shareholding is condition precedent to the appointment- failure to take the shares – it may become null and void

If AOA requires shareholding qualification – nobody can be named as director or proposed director in the AOA, MOA, prospectus or statement in lieu of prospectus unless before the registration of these documents s 123(1)(a)-(d) : i- he had signed the MOA for shares not less than the prescribed qualification; ii- signed and lodged Form 46 with the ROC – to take and pay for the shares; iii- signed and lodged Form 47 with ROC ROC – that a number of shares are registered in his name; iv- Form 48 for company involve in reconstruction, merger.

the director must obtain his subscribe to his qualification shares w/in 2 months after his appointment or such shorter period fixed by the AOA [s 124(1)] The shares cannot be held jointly with other persons unless so provided by the AOA. [s 124(2)] Failure to take the shares w/in the period prescribed by the CA or the AOA – director must vacate his office. [s 124(3)]

Failure to vacate office – an offence – RM1000. [s124(3)] He cannot be reappointed as director until he had taken the prescribed qualification shares [s124(4)] iii- Age Full age [Age of Majority Act] 70 or more cannot be a director of public company or its subsidiary

The AOA/ MOA may provide that the max age of director is 70. AOA/MOA may limit the max age to any age. [s 129(1)] In case of a public company, upon reaching the age of 70, the director’s office become vacant at the conclusion of the AGM held after his 70th birthday.[s129(1)] His act remain valid even though there is a defect in the appointment or his appointment was terminated because of the age limit. [s129(3)]

Person of more than 70 years old can be appointed or reappointed as director of a public company – ¾ majority passed a resolution to that effect in a general meeting (AGM/EGM) notice not less than 14 days. [129(6)] the appointment valid until the next general meeting of the company. Director of public company must, w/in 14 days after his appointment, inform the company the date when he will be 70. [s135(1)(d) & (2)(c)] Director can’t assign his office to other person unless approved by the company special resolution.[s 138(1)]

This rule does not affect the appointment of alternate or substitute director. [s 138(2)] What is the effect of a defective appointment? e.g. resolution was passed by less than the required vote. S 127 – director’s act is valid if after the act had been performed it was discovered that there was a defect in his appointment or qualification. Protect outsider dealing with the company in good faith.

S 156(1) & (3) – provides that if the minute of the meeting is properly kept the company cannot deny its validity. Hence, if the director was appointed and the resolution is properly kept, the appointment of the director is deemed to be valid]. Montreal & St Lawrence Light and Power Co v Robert Contract bet M and R to buy R’s property. M agreed to pay $15,000 and the balance of $260,000 will be paid later. The contract provided that M has the right until 30/11 to cancel the contract and R must return the $15,000 paid to him.

The contract was signed by the president, Mr Porteous and Mr Kitto, the company secretary. On 7/1 – M brought an action against R claiming that the contract was null and void. R also brought an action claiming the balance of the purchase price. The court at first instance reject R’s action and entertained M’s claim for the $15,000. After two appeals at wh M’s claimed was dismissed, M appealed again.

The issue in this case involve the directors' meeting of 17/7. The minutes of that meeting were entered by Porteous himself. The preamble to the resolution certainly contains the word "option." "The purchase," it says, "was to be in the shape of an option up to November 30, 1901, for the sum of $275,000, of which $15,000 is to be paid in cash on the passing of the deed to the company." The resolution is, "That the president and secretary be authorized to complete the transaction and sign the necessary documents."

M argued that meeting on 17/7 was irregular as there was no quorum present; therefore the resolution passed on that occasion was invalid. Held- the by-laws of M are not public property. They concern matters of internal management. Those who deal with the company have no means of access to them, no right to pry into the company's archives or interrogate its officials. There was nothing to put R. The officials of the company, the president, the secretary, and the notary furnished him with a copy of a resolution which purported to be a resolution of the directors duly and regularly passed. On the faith of that representation R altered his position and parted with his property.

M cannot now be heard to say to the vendor: "You should not have given credit to what our people told you." If such a plea were listened to, no one would be safe in dealing with a company having private regulations of its own inaccessible to the outside world to which appeal could be made, in case of need, to relieve it from solemn obligations or save it from a bad bargain.

DIRECTORS DEF: s 4(1) i- officer;