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The Constitution of New Wave Tunes Pty Ltd Provides the Following

Question 12

Multiple Choice

The constitution of New Wave Tunes Pty Ltd provides the following article:
"A director's term of appointment expires after 3 years from the date the director is appointed. At the end of the 3 years, the director is deemed to be terminated and must be re-appointed by the shareholders passing an ordinary resolution."
Mary was first appointed as a director of New Wave Tunes Pty Ltd on January 1, 2015. She has never been reappointed by the shareholders but has continued to act as a director. Which of the following is correct?


A) Mary is not a director as she was not validly appointed after her initial term expired.
B) Since Mary has been acting as a director while not been validly appointed, she will be deemed to be automatically disqualified from managing a corporation.
C) Mary will be deemed to be a de facto director because she has not been validly appointed as a director but continues to act as a director.
D) Any act done by Mary after her initial term expired is invalid and ineffective because she was not validly re-appointed as a director.
E) The abovementioned article in the constitution is invalid because the Corporations Act says the maximum term for a director's appointment is one year and thereafter the director must be re-appointed by the shareholders.

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