Thank you for responding to my queries.
My interpretation is that if the Directors were to spend money on the services of a Planning consultant, without prior approval of the shareholders, then they would be (could possibly/probably? be) acting “ultra vires”, i.e. beyond their power and potentially could be held to be personally liable for the expenditure incurred.
However if the directors do obtain the approval of the shareholders then, as you say, they should not be held liable personally and the company will have committed a valid act. Obtaining such approval would effectively over-ride the limitations set by the Agreement and/or the Memorandum.
Is this interpretation correct and is it a “would” or “could possibly” or “could probably” in the paragraph above?
You asked whether 75% of shareholders would be likely to support using company funds to fund the planning consultant, so the question arises, if we ask for the approval of shareholders, do we need:
- - A simple majority (>50%) of those who respond.
- - A simple majority (>50%) of all of the shareholders
- - A greater majority (>75%) of those who respond.
- - A greater majority (>75%) of all of the shareholders.
I think that we would be foolish not to follow your advice and seek approval from Shareholders, the development is fairly small so I imagine that we will deliver a letter by hard copy to all shareholders (some shareholders do not use email) and back that up by an email copy. The following questions arise:
- - Can we accept email returns?
- - What length of time would it be reasonable to allow for responses? I am not aware of anyone being away from home but I suppose some people might be taking holidays.
- - We have one shareholder in Australia, would an email followed up by hard copy be sufficient to start the clock ticking for period allowed for responses.
Many thanks for all you help. I look forward to hearing from you.