(1) The directors must not set a board limit unless:
(a) a resolution (a board limit resolution ) approving the proposal to set the limit specified in the resolution has been passed by a general meeting of the company; and
(b) the notice of the meeting set out an intention to propose the board limit resolution and stated the resolution; and
(c) the notice was accompanied by a statement explaining the resolution and meeting the requirements in section 201Q.
Note 1: Subsection 249L(3) requires information in the notice of meeting to be presented clearly, concisely and effectively.
Note 2: Section 201U specifies the consequences of a contravention of subsection (1) of this section. Also, section 1324 provides for injunctions to enforce subsection (1) of this section.
(2) A board limit resolution has effect until immediately before the start of the first AGM of the company after the general meeting by which the resolution was passed.
(3) A board limit resolution does not prevent the appointment of a person as a director of the company by the other directors of the company between general meetings of the company.
(4) However, if a person is appointed by the other directors as a director of the company while a board limit resolution has effect, the company must confirm the appointment by resolution at the company's next AGM. If the appointment is not confirmed, the person ceases to be a director of the company at the end of the AGM.
(5) Subsections (1), (2) and (4) have effect despite the company's constitution.
Note: Although subsection (4) is like subsection 201H(3) in many ways, it is not a replaceable rule like subsection 201H(3).