Resolution passed but never sent to CH. Is it valid?

[MrChris]

Hello,

I need your knowledge and experience please.

Scenario:
a) Say that there is a company with Articles which specify that at least 3 directors should be on the board but the company is currently running with 2 directors.

b) Say that the company does an AGM, without sending first an agenda to the members that an important resolution will take place, and then passes a resolution (by voting) that the company can continue operating with only 2 directors. Majority decides yes.

c) The meeting ends BUT:
The directors do not send the resolution to CH for filing even after having received complaints from other members that there should be more directors (or least 3 as specified by current articles).
Assume that the 15-days limit for filing has long passed now.
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Question:
Will it be valid to say that:
1) Such an important change should be done with a proper AGM agenda sent to members in advance &
2) Such an alteration of the board structure should be done with a proper amendment of the articles and hence those must be filed with CH.

3) Since 1&2 did not take place, the company does not have a valid structure and therefore is not in position to take any decisions. Would this be a valid legal argument...or filing with CH is not that important after all for the new board status to be legal?

Your thoughts?

 

[nelioneil]

Has the 1st provision been (min number of directors) been since the company was formed?

 

[MrChris]

Hi there.

Yes. The company is several decades old and is still using the 1st set of articles which clearly state minimum 3 directors.
There is no resolution or any other document submitted to CH which states that this limitation has been altered.

In addition to that the "Directors" submit every year a "no members" annual return which in reality is wrong. There are many members.
The latter is definitely intentional and not a mistake since there has be been a complaint to CH for non providing the members contact list to a member who asked it. Even after that they still file a no-members annual return.

 

[The Resolver]

Firstly, whilst there are legal duties to file certain documents and notice of certain changes at CH, failure to do so does not itself invalidate any action taken.

The Notice of the meeting has to be at least 14 days and it must explain "the general nature of the business to be dealt with at the meeting." But that does not mean that a Resolution properly passed at a meeting is not valid. It just gives an opportunity to try to invalidate it through court (too costly and too lengthy a process).

Changing the Articles requires a 75% majority. You mention there being 'many members'. How many were at the meeting? Is this a company limited by guarantee and not shares? If not then what are the shareholdings and how many at the meeting?