The BOD at the BM approved a contract to Arc Builders The said contractor was having less than 2 nbs...........

Companies Act-Phase (I & II) Board-powersandMeetings

The BOD at the BM approved a contract to Arc Builders. The said contractor was having less than 2 years 11 months of Building experience in Infra projects at that point. At the ensuing General meeting 3 months later, the Company added a regulation that only Contractors with more than 3 years of Builiding experience shall be hired . Arc Builders’ contract was rescinded as a result retrospectively, as the GM was of the opinion that Shareholders can undo decisions made by BOD, and can provide retrospective ratification or revocation. Is the treatment correct.

No, the BOD’s decisions cannot be retrospectively rescinded by GM of shareholders as they were valid on the day they were made

Yes, the Shareholders at GM are true owners of the Company and can do ratify as well as rescind a contract retrospectively

No, the Shareholders cannot rescind the contract as on the relevant date of GM the Arc Builders have requisite experience

None of the Above

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Explanation:

Section 179(2) provides that no regulation made by the company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made.