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Shareholders Appointing Directors

  • 05-10-2017 11:38am
    #1
    SharonF2
    Registered Users, Registered Users 2 Posts: 2 ✭


    Hi,

    I'm involved in a firm of 3, % holdings are 52%, 24% and 24%

    The company constitution is silent on appointing new directors (other than off the shelf standard conditions) so it then falls on the Companies Acts to define the situation.

    Under the Acts, the shareholders can appoint directors (with relevant notice for the EGM), by one of 2 methods:
    A. Shareholders show of hands (which means the 2 x 24% holders would control the appointment, ie they have 2 votes out of 3)
    B. Shareholders can hold a poll, one vote per share, which means that the 52% holder would control the appointment (ie she has 52 votes out of 100)

    What I'm not clear on is how or what determines whether method A or B is to be used is determined?

    Anyone any experience in this?


Comments

  • #2
    Victor
    Registered Users, Registered Users 2 Posts: 78,574 ✭✭✭✭Victor


    How many directors are contemplated by the company constitution?

    I would assume some form of proportional representation would apply - that 52% of votes doesn't give you 100% of directors. More that it would give you roughly 52% of directors.


  • #3
    SharonF2
    Registered Users, Registered Users 2 Posts: 2 ✭SharonF2


    There's no limit to directors other than the general rules.

    Problem stems from the potential that Ms. 52 has been MD and performed very badly, so will be removed as MD.

    Want to get a feel for what steps can be taken to prevent Ms. 52 (as majority shareholder) from appointing directors ("Stuffing the board") and re-appointing herself as MD.

    If she can put 2 directors on the board, then its 3 v 2, so she can re-appoint herself as MD.


  • #4
    hullaballoo
    Administrators, Entertainment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 18,773 Admin ✭✭✭✭✭hullaballoo


    She's a majority shareholder. She can effectively do what she likes and you have misinterpreted the rules on the appointment of directors.

    If you have very serious concerns about the company's well-being (for want of a better turn of phrase), there are options open to you but only should these options be taken up with the advice of a competent legal professional who has an established practice in the area of company law.

    I am afraid that's as far as it can be put in this forum due to the rule against legal advice.

    Thread closed.


This discussion has been closed.
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