Company Meeting Notice Critique

Summary

A bankrupt individual cannot be elected as a director under the Companies Act. The notice for an AGM must be at least 21 days, not 7. Significant decisions like land sales require board or shareholder approval, not unilateral action. Advertising without board approval is unauthorized. Davids personal financial interest in the project presents a conflict of interest, requiring transparent board discussion and approval.

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A marketing specialist by trade, David is very keen on the company closing on a *-acre Cam parcel of land situate on L.R. No. */*. Having recently been adjudged bankrupt much to the chagrin of his sisters Rose and Cynthia - David believes that the company's next project can be designed around this parcel of land and of his own volition, he has even started putting up billboards marked "Mixed used development coming soon, Reserve your plot now and Jenga Nchi." David is confident that the advertised project will change his fortunes for the better and he proceeds to call an annual general meeting of the company "within the next seven (*) days for purposes of electing David Kumo as a director of the company and appointing him as a sole signatory under seal with the authority to enter into an agreement for the sale and purchase or L.R. No. */*." a) As the Company Secretary and with aid of relevant provisions of the law, critique the notice issued by David. S. (* marks)
Here are some key points to critique the notice issued by David based on relevant provisions of the law:
*. Bankruptcy Status:
- Under the Companies Act, a person who is adjudged bankrupt is disqualified from acting as a director. David's recent bankruptcy means he cannot legally be elected as a director.
*. Calling an Annual General Meeting (AGM):
- The Companies Act and the company’s MEMARTS stipulate the procedures for calling an AGM. The notice period for AGMs typically requires at least 21 days, not the 7 days stated by David.
*. Authority to Enter Agreements:
- According to company law, significant decisions like entering into land sale agreements require approval from the board or shareholders. David cannot unilaterally appoint himself as the sole signatory.
*. Billboard Advertisements:
- David’s unilateral decision to advertise the project without board approval could be considered unauthorized and premature, especially since he lacks the requisite authority.
*. Conflict of Interest:
- David’s personal interest in changing his financial status through the project could be a conflict of interest, and such matters should be transparently discussed and approved by the board.