Company Decision-Making

Question 1

Rule (MA 9) When a director calls a board meeting, they must give … to …

There is no need for it to be in writing, but it must include…

Answer 1

Reasonable notice to the other directors
…the time, date and place of the meeting (MA 9(3)).

Question 2

Rule (MA 11) A quorum of … must be present at all times during a board meeting.

Answer 2

Two directors

Question 3

Rule (MA 14) A director may not count in the quorum or vote if a proposed decision of the board is: (two bullets)

Answer 3

• concerned with an actual or proposed transaction or arrangement with the company,
• in which a director is interested.

Question 4

Rule (s 177 CA 2006): Where a director has a personal interest in a proposed transaction or arrangement with the company, they * must *

Answer 4

declare the nature and extent of this interest to the board.

Question 5

A director does not need to declare their personal interest in a proposed transaction or arrangement with the company if: (3 bullets)

Answer 5

1. it cannot reasonably be regarded as likely to give rise to a conflict of interest;
2. the other directors are already aware of it; or
3. it concerns terms of a service contract that have been or are to be considered by a meeting of the directors.

Question 6

What is the key difference between the obligation to declare a personal interest and the prohibition on counting in the quorum and voting when the director has a personal interest in the subject of the resolution?

Explain with reference to the section/model article numbers.

Answer 6

The s.177 obligation to declare a personal interest cannot be disapplied whereas the MA 14 prohibition on counting the quorum can be disapplied.

Question 7

Rule (MA 7): Board resolutions are passed by … In other words…

Answer 7

Simple majority. In other words, over half of those present must vote in favour of the board resolution.