Section 201P — Corporations Act 2001: Directors must not set board limit unless proposed limit has been approved by general meeting

(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).