99. The co may by extraordinary resolution remove any director Form 117. before the expiration of his period of office, and appoint another [quali- Power to fied] person in his stead: the person so appointed shall hold office during remove director by such time only as the director in whose place he is appointed would have held the same if he had not been removed. As to meaning of extraordinary resolution, see infra, "Resolutions." Table A. provides for removal by special resolution. Sometimes the clause is framed as follows: "The company in general meeting may," &c. Unless the regulations give the requisite authority, a director cannot be removed even by special resolution. Imperial Hydropathic Co. v. Hampson, 23 C. Div. 1. If there is no power the articles must first be altered, and then the power exercised. However, if in any case where there is no power it is desired to act promptly, a special resolution can be passed giving power to a general meeting to remove, and the notice convening the confirmatory meeting can state that if the resolution is confirmed a further resolution will be proposed removing Mr. A. from office. Sometimes the majority is not sufficiently powerful to pass a special resolution for removal. In such case it may be expedient to pass a resolution dismissing the director, for where the majority is against a director, the Court will not force him on the company by injunction. Harben v. Phillips, 14 C. Div. 14. special reso lution. 100. Any casual vacancy occurring among the directors may be filled Directors may up by the directors, but any person so chosen shall retain his office so fill up casual vacancies. long only as the vacating director would have retained the same if no vacancy had occurred. This clause is usually inserted. It would be extremely inconvenient in most cases if a general meeting of the company had to be called to fill up a casual vacancy. A casual vacancy means any vacancy arising otherwise than by retirement under Cl. 94. Munster v. Cammell Co., 21 C. D. 183. Where the directors are given a general power [supra, note to Cl. 85] to appoint additional directors, this clause will be omitted. of director 100a. No person, not being a retiring director, shall, unless recom- When candimended by the directors for election, be eligible for election to the office date for office of director at any general meeting, unless he, or some other member in- must give tending to propose him, has, at least seven clear days before the meeting, notice. left at the office of the co a notice in writing under his hand signifying his candidature for the office, or the intention of such member to propose him. This clause is found convenient and for the benefit of a company. It enables inquiries to be made as to a candidate's antecedents, &c., &c. See Barber's case, 5 C. Div. 963. MANAGING DIRECTOR. managing 101. The directors may, from time to time [with the sanction of a Power to general meeting], appoint one or more of their body to be managing appoint director or managing directors of the co, either for a fixed term or director. without any limitation as to the period for which he or they is or are to hold such office, and may from time to time remove or dismiss him or Form 117. them from office and appoint another or others in his or their place or What provisions he will places. The words in brackets are commonly omitted. The above and the following are the usual clauses as to a managing director. It seems expedient in most cases to insert them in order to avoid the necessity of having to alter the articles. Of course the exercise of the powers contained in these clauses is optional. Not uncommonly the first managing director is appointed by the articles. See Forms, infra, "Miscellaneous Clauses." 102. A managing director shall not, while he continues to hold that be subject to. office, be subject to retiremt by rotation, and he shall not be taken into account in determining the rotation of retiremt of directors, but he shall, subject to the provisions of any contract between him and the co, be subject to the same provisions as to resignation and removal as the other directors of the co, and if he cease to hold the office of director from any cause he shall, ipso facto, and immediately, cease to be a managing director. Remuneration of managing director. Powers and duties of managing director. 103. The remuneration of a managing director shall from time to time be fixed by the directors [or by the co in general meeting], and may be by way of salary, or commission, or participation in profits, or by any or all of those modes. Sometimes the articles give him a commission on the profits, or on the surplus profits, or on the dividend paid. 104. The directors may from time to time entrust to and confer upon a managing director for the time being such of the powers exercisable under these presents by the directors, as they may think fit, and may confer such powers for such time, and to be exercised for such objects and pposes, and upon such terms and conditions, and with such restrictions as they think expedient; and they may confer such powers, either collaterally with, or to the exclusion of, and in substitution for, all or any of the powers of the directors in that behalf; and may from time. to time revoke, withdraw, alter, or vary all or any of such powers. These powers will be conferred by resolution of the directors. In the absence of express power to delegate, the maxim "delegatus non potest delegare," applies to directors, Howard's case, 1 Ch. 561; Harris' case, 7 Ch. 587. In the latter case there being a power to delegate, it was held that an allotment made by a committee instead of by the board of directors was valid. See also Re Land Credit Co., 4 Ch. 460. See the general power of delegation, infra, Cl. 110. For exceptions to rule, see Bussche v. Alt, 8 C. Div. 300, and Rossiter v. Trafalgar Co., 27 Beav. 380. Meetings of directors, quorum, &c. PROCEEDINGS OF DIRECTORS. 105. The directors may meet together for the dispatch of business, adjourn, and otherwise regulate their meetings, as they think fit, and may determine the quorum necessary for the transaction of business. Until otherwise determined three directors shall be a quorum. As to whether a meeting is essential to the transaction of business, see infra, Form 117. p. 150, note to Clause 113. Where as above (Clause 83) it is provided that there shall be a certain minimum number of directors, and the articles fix the quorum, it seems that if by vacancies the number be reduced to less than the minimum, in the absence of a clause similar to 91, nothing can be done until the minimum number is made up. Kirk v. Bell, 16 Q. B. 290; Scottish Petroleum Co., 23 C. Div. 413. Where directors have authority to delegate their powers, such a delegation will be presumed if one or two of the directors act for the company in a matter properly within its legitimate business. Totterdell v. Fareham Brick Co., 1 C. P. 674; Re Regent's Canal Co., W. N. 1867, 79; Lyster's case, 4 Eq. 233; Lyon's case, 35 Beav. 646. And a formal resolution is not in all cases necessary: "I have no hesitation in saying that it was not necessary for the directors to pass any resolution in order to make the acceptance of the bills binding on the company, or in saying that if the directors met together, and the chairman, with their knowledge, accepted a bill of exchange, that would bind the company. In the same way, if a bill of exchange had been accepted by the chairman, without due authority, and the directors afterwards, knowing that the acceptance had been given and dealt with, acted on the footing that the bill had been properly accepted, I should not have the least hesitation in saying that the acceptance would bind the company." Per Giffard, L. J., Re Land Credit Co., 4 Ch. 473. 106. A director may at any time [and the secretary, upon the request Director may of a director, shall] convene a meeting of the directors. Questions summon arising at any meeting shall be decided by a majority of votes, and in How questions case of an equality of votes the chairman shall have a second or casting to be decided. vote. meeting. 107. The directors may elect a chairman of their meetings and deter- Chairman. mine the period for which he is to hold office, but if no such chairman is elected, or if at any meeting the chairman is not present at the time appointed for holding the same, the directors present shall choose some one of their number to be chairman of such meeting. Sometimes the first chairman is specified so as to avoid discussion. 108. A meeting of the directors for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers, and discretions by or under regulations of the co for the time being vested in or exercisable by the directors generally. This clause merely expresses that which has hitherto been generally assumed, but as some doubt has been raised whether the ordinary clause as to a quorum [103] enables a board meeting to act in regard to important matters, it seems desirable to provide as above. See New Sombrero Co. v. Erlanger, 5 C. Div. 73; 3 Ap. Cas. 1218; Alma Spinning Co., 21 C. D. 183. A director who is disqualified cannot be counted in a quorum. Ibid. mittees and 109. The directors may delegate any of their powers to committees Power to consisting of such member or members of their body as they think fit. appoint comAny committee so formed shall in the exercise of the powers so dele- to delegate. gated conform to any regulations that may from time to time be imposed on it by the directors. This clause is generally inserted, and is of great practical convenience. See Form 117. Re Taurine Co., 25 C. D. 118; 32 W. R. 129; 49 L. T. 514. It will be observed that the committee may consist of one member only. As to where a delegation will be presumed, see note to Clause 105, supra, ad fin. Proceedings of committee. When acts of directors or committee valid, not 110. The meetings and proceedings of any such committee, consisting of two or more members, shall be governed by the provisions herein contd for regulating the meetings and proceedings of the directors, so far as the same are applicable thereto, and are not superseded by any regulations made by the directors under the last preceding clause. 111. All acts done at any meeting of the directors, or of a committee of directors, or by any person acting as a director, shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointmt of such directors or persons acting as afsd, or that they pointment, &c. or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director. withstanding defective ap Resolution without board This clause is usual. It goes rather further than s. 67 of the Act. See infra, note to Cl. 112. See also County Life Ass. Co., 5 Ch. 288, and other cases cited in note to Cl. 88. 112. A resolution in writing, signed by all the directors, shall be as meeting valid. Valid and effectual as if it had been passed at a meeting of the directors duly called and constituted. Remuneration for extra service. This clause is now not unfrequently adopted, and is found convenient. Whether in the absence of such a clause directors can act without a board meeting has not been finally decided, but it would seem that they can. Collie's Claim, 12 Eq. 258; but see D'Arcy v. The Tamar, &c., Co., L. R. 2 Ex. 158. 112a. If any of the directors shall be called upon to perform extra services or to make any special exertions in going or residing abroad, or otherwise for any of the pposes of the co, the co shall remunerate the director or directors so doing, either by a fixed sum or by a percentage of profits or otherwise as may be determined, and such remuneration may be either in addition or in substitution for his or their share in the remuneration above provided. This clause is sometimes inserted. Minutes to be made. MINUTES. [112b. The directors shall cause minutes to be duly entered in books provided for the ppose (a) Of all appointmts of officers. (b) of the names of the directors present at each meeting of the (c) Of all orders made by the directors and committees of directors. And any such minutes of any meeting of the directors, or of any committee, or of the co, if purporting to be signed by the chairman of such meeting, or by the chairman of the next succeeding meeting, Form 117. shall be receivable as primâ facie evidence of the matters stated in such minutes.] The above clause is sometimes inserted and may possibly be useful as a reminder, but, if brevity is desired it can be omitted, for s. 67 of the Act sufficiently provides for these matters. The section is as follows: "Every company under this Act shall cause minutes of all resolutions and proceedings of general meetings of the company, and of the directors or managers of the company, in cases where there are directors or managers, to be duly entered in books to be from time to time provided for the purpose; and any such minute as aforesaid, if purporting to be signed by the chairman of the meeting at which such resolutions were passed, or proceedings had, or by the chairman of the next succeeding meeting, shall be received as evidence in all legal proceedings; and until the contrary is proved every general meeting of the company or meeting of directors or managers in respect of the proceedings of which minutes have been so made shall be deemed to have been duly held and convened, and all resolutions passed thereat or proceedings had to have been duly passed and had, and all appointments of directors, managers, or liquidators shall be deemed to be valid, and all acts done by such directors, managers, or liquidators shall be valid, notwithstanding any defect that may afterwards be discovered in their appointments or qualifications." Even apart from the Act the clause would appear to be effectual as against any member of the company although of course not against strangers. See Roney's case, 12 W. R. 816, 994; 4 D. J. & S. 426. POWERS OF DIRECTORS. company directors. 113. The managemt of the business and the control of the co shall be General vested in the directors, who, in addition to the powers and authorities powers of by these presents expressly conferred upon them, may exercise all such vested in powers and do all such acts and things as may be exercised or done by the co and are not hby or by statute expressly directed or required to be exercised or done by the co in general meeting, but subject nevertheless to any regulations from time to time made by the co in general meeting; provided that no regulation shall invalidate any prior act of the directors which would have been valid if such regulation had not been made. The above clause is usual. If it is desired to limit the authority of the directors express provision is accordingly made, but subject thereto, the general powers of the company are almost always given to the directors. See and compare Clause 55 of Table A. And such a general delegation is valid and effectual. Thus In re Patent File Co., 6 Ch. 83, the articles authorised the borrowing of money with the sanction of an extraordinary meeting of the company; they also contained a clause substantially the same as above. The directors overdrew the company's banking account, and being required by the bank to give security, deposited titledeeds of property belonging to the company. It was held in the winding-up of the company, that the mortgage was valid. James, L.J., said (inter alia,) that it was "plain that, under these articles, the directors can do anything which the company could do, unless it is an act which they are specially prohibited from doing. I can find nothing in the memorandum or articles to prevent the directors from making the best terms they can with a creditor of the company by selling or pledging part of the property of the company." And Mellish, L.J., said (inter alia), "The articles give to the directors the |