Service contract was entered into between company and C (the former managing director of company) appointing him consultant for life. No written resolution was passed by shareholders approving service contract, as required by what is now s.188 in relation to directors’ service contracts of longer than certain period of years. However all the company’s shareholders were informed of arrangement and consented to it. Held:
· If person for whose benefit a procedural requirement exists waives the right, informal consent is valid.
Ø i.e. anyone with a procedural right is competent to waive that right
· However doubted whether it is possible to use informal procedure where calling of meeting is for benefit of
a. future members
· Purpose of what is now s.188 is protection of company’s members.
· Thus members, as those protected by section, can override any formal requirements in section.
· Therefore service contract was binding on company.