“Article 6 of the articles of Ferris George & Sons Limited confers as wide a discretion as that conferred in Re Smith & Fawcett Limited, but on the evidence the directors have never positively exercised their power of rejecting the transfer, and there is authority for saying that mere inaction is not enough for this purpose. In Re Hackney Pavilion [1924] 1 Ch. 276 Astbury, J., held that where the articles gave the directors the power of declining to register a transfer that power, even where exercisable in the absolute an uncontrolled discretion of the directors, required to be actively exercised by a vote of the Board adhoc, and that a mere failure to pass a resolution for registration (on an equality of votes with no provision for a casting vote) was not a formal exercise of the right to decline. In the circumstances Astbury, J., ordered the register to be rectified. This decision was approved and followed by the House of Lords in Moodie & Anor v. W. & J. Shepherd (Book binders) Limited & Ors [1949] 2 All E.R. 1044, and should be followed by the courts in Nigeria.”
COMPANY LAW – Directors – Effect where the directors of a company do not exercise their rights to decline to register a transfer of shares where the Articles of the Company grants such powers
COMPANY LAW – Memorandum and Articles of Association – Importance of the memorandum of association after incorporation of a company; effect of going outside the scope of the stated objects in the memorandumCOMPANY LAW – Registered Company – How to ascertain if a company has been duly registered under the Companies Act