A small private company has a problem with one director who is holding the company to ransom and withholding financial information (knowingly breaching s286 CA06). As a result, the prior year’s accounts were filed 9m late.
In consequence, the current year’s accounts were close to the wire. By the time they were completed, there was insufficient time to call a board meeting to approve the accounts and no chance (due to the conflict) of agreeing a short dated meeting if they were to be filed before the statutory deadline.
Instead, the members approved the accounts by ordinary written resolution, via simple majority.
A well-intentioned but probably mistaken attempt to ensure the accounts were approved before filing, or oversight from the old boy drafting them relaying on pre CA06 perhaps.
All directors are also members.
The board is currently paralysed again and a motion to ratify the members resolution for the purposes of s414 CA06 failed (some directors changed their votes).
Has anyone seen a similar situation, or have experience of how the vote of the members approving the accounts might be considered WRT the requirement for directors to approve the accounts before filing?
Does the fact that all directors are members too make a difference given there is no failure to circulate, no loss to creditors, no intent to deceive or disrupt - umm except for the director deliberately withholding information from his fellow directors (but that is another story and I have a few unpublishable ideas on what to do about that issue!)
Appreciate there are issues of competence and failure to act by other directors to address their chums obstruction – just wondering if anyone can advise on the effect and validity if any of the members ordinary resolution vis a vis approving the accounts given all members are also directors and vice versa.
thanks in advance