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Articles of Association

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Articles of Association

  • This topic has 10 replies, 4 voices, and was last updated 4 weeks ago by MikeLittle.
Viewing 11 posts - 1 through 11 (of 11 total)
  • Author
    Posts
  • December 5, 2022 at 4:17 pm #673498
    Sacca22
    Participant
    • Topics: 28
    • Replies: 37
    • ☆☆

    Hi,

    I am confused on the following question:

    The Articles of Association of ABC Ltd provide that all disputes between ABC Ltd and it’s directors must be referred to arbitration. Del is a director of ABC ltd and is in dispute with the company about late payment of his director’s fees. Which of the following is / are correct?

    1- Del is obliged by the AOA to refer the dispute to arbitration, whether or not he is a shareholder.

    2- Del is obliged by the AOA to refer the dispute to arbitration only if he a shareholder.

    The answer is neither.
    ————————————-
    The AOA contain rules on a number of areas, including: Powers, responsibilities and liabilities of directors so why is the 1 not an option?

    Thank you.

    December 5, 2022 at 10:08 pm #673559
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    The Articles are the binding contract between:

    the company and its members,
    the members and its members and
    the members and the company

    But where the Articles appear to be binding on a director or other interested third party, these people may only rely on the Articles as a binding contract in their capacity as shareholders

    The case Eley v Positive Government Life Assurance Company is a case in point as also is the case Baillie v Baillie

    OK?

    December 13, 2022 at 5:46 am #674399
    Sacca22
    Participant
    • Topics: 28
    • Replies: 37
    • ☆☆

    So basically even though the AOA provides that director disputes are to be settled through arbitration, it is not binding because it is outside the scope of AOA to bind a director to the company?

    December 13, 2022 at 8:29 am #674421
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    That is correct

    OK?

    December 14, 2022 at 6:20 am #674478
    Sacca22
    Participant
    • Topics: 28
    • Replies: 37
    • ☆☆

    Yes thank you!

    December 14, 2022 at 6:41 am #674482
    sm8980
    Participant
    • Topics: 48
    • Replies: 38
    • ☆☆

    Hi Sacca22,

    Apologies, I know this is not the forum for this question but I’m not sure how else to connect. I have seen your posts on the FA forum and they were the same questions I had. I wondered if you were still sitting the FA exam and wanted to be study buddies?

    Thank you

    December 14, 2022 at 9:44 pm #674589
    Sacca22
    Participant
    • Topics: 28
    • Replies: 37
    • ☆☆

    Hi sm8980!

    Unfortunately I already sat the FA paper last month, but good luck on your upcoming exam!

    December 14, 2022 at 10:34 pm #674614
    sm8980
    Participant
    • Topics: 48
    • Replies: 38
    • ☆☆

    Thanks for the response Sacca, what a shame (for me ?). Congrats on passing =)

    All the best

    December 20, 2022 at 8:14 am #674944
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    Well! I’m glad that that’s resolved even if the resolution doesn’t suit everyone’s aspirations 🙂

    And well done Sacca on passing your FA exam (as well as the Law paper)

    December 29, 2022 at 2:07 am #675161
    Mustafy
    Participant
    • Topics: 7
    • Replies: 8
    • ☆

    Hi Sacca22, was wondering if you have written the F4 exam.
    How is your studying going?

    I am as well preparing to write in a couple of weeks.

    December 29, 2022 at 6:45 am #675163
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    Mustafy! What does the post immediately above yours say (from me to Sacca) dated 20 December at 08.14?

    It may be that you intended messaging SM8980!

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