6.3 Company Meetings

Question 1

Why are company meetings important for shareholders?

Answer 1

General meetings give an opportunity to the shareholders of the company to vote on important matters, thereby exercising their ultimate powers of control over the company.

Question 2

How often do companies typically hold an Annual General Meeting (AGM)?

Answer 2

Every year

Question 3

What are the rule surrounding the timing and frequency of an Annual General Meeting (AGM)?

Answer 3

Annual General Meetings (AGMs) must be within six months of the end of their financial year, and the interval between Annual General Meetings (AGMs) must not exceed 15 months.

Question 4

What matters are typically discussed at Annual General Meetings (AGMs)?

Answer 4

Matters discussed will typically include normal recurring business such as directors’ and auditor’s appointments.

Question 5

What report do listed companies have to present and what does the report contain?

Answer 5

Listed companies must present a remuneration report explaining the various aspects of directors’ remuneration.

Question 6

How often must an implementation report be voted on?

Answer 6

Annualy

Question 7

How often must a remuneration policy by voted on?

Answer 7

At least every three years

Question 8

What other types of general meetings are there?

Answer 8

A company may also hold other general meetings, at which unusual or particularly pressing events are debated as they arise. Directors must also call a general meeting in the event of a serious loss of capital.

Question 9

Who normally calls a meeting?

Answer 9

The board

Question 10

Who can requisition a general meeting?

Answer 10

A general meeting can be requisitioned by shareholders who, between them, own 5% or more of the company’s voting shares, assuming 12 months have passed since the last meeting. If the directors fail to call a meeting once it has been requisitioned, the shareholders may hold a meeting at the company’s expense.

Question 11

How much notice must be given to shareholders before an Annual General Meeting?

Answer 11

21 calendar days’

Question 12

How much notice must be given before other general meetings?

Answer 12

14 calendar days’ notice

Question 13

When is an electronic communication deemed to be sent?

Answer 13

When the electronic notice is first transmitted and delivered 48 hours after being sent.

Question 14

When can the notice periods be shortened?

Answer 14

In the event of consent of 100% of shareholders in respect of an AGM, and 95% of shareholders in respect of another general meeting.

Question 15

How are decisions made at general meetings?

Answer 15

By the passing of resolutions.

Question 16

What are the 2 types of resolutions?

Answer 16

1. Ordinary
2. Special

Question 17

What determines which matter requires which type of resolution?

Answer 17

The Companies Act prescribes which matters require which type of resolution.

Question 18

What do ordinary resolutions require?

Answer 18

A simple majority of the votes to be passed i.e. more than 50%.

Question 19

List 4 examples of issues approved by ordinary resolution include.

Answer 19

1. Approval of the annual financial statements
2. Appointment and removal of auditors
3. Appointment and removal of directors
4. Approval of a dividend – where dividends are rejected, the directors will propose an alternative dividend Most of the business of an AGM is conducted by way of ordinary resolution.

Question 20

What do special resolutions require?

Answer 20

Special resolutions require a majority of 75% or more of the votes in order to be passed.

Question 21

List 4 examples of issues approved by special resolution.

Answer 21

1. Changing the company’s name
2. Waiving pre-emption rights
3. Change to the Memorandum or Articles of Association
4. Share buy-backs

Question 22

What are the notice rules for individual resolutions, ordinary resolutions and special resolutions?

Answer 22

Individual resolutions also require notice to be given to shareholders.
Ordinary resolutions require 14 calendar days’ notice.
Special resolutions require 21 calendar days’ notice.

Question 23

How is the passing of resolutions often carried out?

Answer 23

By a show of hands

Question 24

How many votes is a shareholder usually entitled to?

Answer 24

Each shareholder present is usually entitled to one vote each per resolution regardless of the number of shares they hold.

Question 25

What is another way resolutions can be voted?

Answer 25

Resolutions may also be voted by way of a full ballot (or poll). This is a written voting process where each shareholder receives voting rights determined by the number and class of their shares. A poll vote may be demanded by shareholders representing 10% or more of the voting rights in the company.

Question 26

List 3 groups or individuals who can demand a poll.

Answer 26

1. Shareholders representing 10% or more of the voting rights in the company
2. Five members having voting rights
3. The chairperson

Question 27

What is the role of a proxy?

Answer 27

If shareholders are unable to attend a meeting, they may appoint a proxy to attend and vote on their behalf. Proxies can vote on issues decided by a written ballot or show of hands in a similar way to shareholders.

Question 28

Name the 2 types of proxies.

Answer 28

1. A special (or ‘two-way’ proxy)
2. A general proxy

Question 29

What is a special (or ‘two-way’ proxy)?

Answer 29

A person appointed and directed to vote for or against a particular resolution

Question 30

What is a general proxy?

Answer 30

A person appointed to vote based on what is said at a meeting.

Question 31

How are proxies appointed?

Answer 31

Proxies are appointed using proxy forms.

Question 32

What is a general proxy?

Answer 32

A proxy form that does not indicate how the proxy is to vote is deemed to be a general proxy.

Question 33

How long will the status of proxy remain valid for?

Answer 33

The duration of the meeting and any adjournment of that meeting.