• 8 Marks

BL – Nov 2015 – L2 – SB – Q1b – Company Law

Describe four circumstances in which a director must vacate office in a company.

Directors of a company are the executives that direct the affairs of the company. Thus, such an important position must have certain attributes and be guided by prescribed rules.

Required:

Explain briefly FOUR circumstances under which a person must vacate office as director of a company.
(8 Marks)

A person must vacate office as a director of a company under the following circumstances:

  1. Bankruptcy: If a director is declared bankrupt or makes an arrangement or composition with creditors, they must vacate the office.
  2. Mental Incapacity: If a director becomes mentally incapacitated and is found to be of unsound mind by a court or medical professional, they must vacate the office.
  3. Disqualification by Law: If a director is disqualified by a court order or under any provision of the Companies and Allied Matters Act (CAMA), they must vacate the office.
  4. Resignation: A director may voluntarily vacate office by tendering their resignation to the board of directors.
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