9 - Company meetings and decision making Flashcards
How can members of public companies make decisions?
Resolutions at a meeting
&
Unanimous assent (but this is unpractical)
How can members of private companies make decisions?
Resolutions at a meeting
&
Written resolution
&
Unanimous assent rule
How is it calculated whether a vote passes at a members’ meeting?
Based only on those who actually vote
Ordinary resolution requires what %?
More than 50%
Special resolution requires what %?
Not less than 75%
‘Resolution’ will be classed as what?
Ordinary resolution
Which decisions cannot take place by written resolution?
Removing director or auditor before period of office has expired
Unanimous assent rule explained
If all members know they agree on a matter, decisions can be made without meeting taking place or resolution passing, so long as they provide their actual assent
Unanimous assent - example of when actual assent will be deemed to have been given
If both shareholders are directors, and the directors make decisions that should be taken my members
When can decisions by unanimous assent be taken
In the place of almost any ordinary or special resolution, and decisions taken at GMs and class meetings
3 examples of conditions/restrictions on use of unanimous assent rule
- Won’t apply if statute requires decision taken at meeting
- Cannot be used for decision that could not have been made by resolution (eg. declaring unlawful dividend)
- Court has stated members must have full knowledge of matter, and have given actual assent (ie. if they would likely have assented, not enough)
Who can call a GM? (3)
- Directors
- Members representing 5% share capital
- The court
Who must be provided with meeting notice? (unless stipulated otherwise by articles)
Members
Directors
Auditor
3 ways in which meeting notice can be provided
Hard copy
Electronic form
By means of website
What must be included in meeting notice? (6 always, 3 others sometimes)
- Time
- Date
- Place
- General nature of business to be dealt with
- Intention to purpose a resolution and the text of the resolution
- Statement informing rights in relation to appointing proxy
- [Statement that meeting is AGM]
- [Additional info in certain instances, such as director’s representations if they are being removed]
- [details of website containing certain required info, if traded company]
Notice for GM
At least 14 clear days’ notice
Notice for AGM
At least 21 clear days’ notice
FRC’s guidance for premium listed companies AGM notice
At least 20WD
What does clear notice mean?
Day of notice and day of meeting do not count
Notice for GM/AGM of traded company
At least 21 clear days’ notice
Meeting notice of traded company can be reduced to 14 clear days if:
- Meeting is not AGM
- Company offers e-voting
- Special resolution passed to reduce voting period
% of members which must agree to shorter notice period of private company than specified in statute
At least 90%
% of members which must agree to shorter notice period of public company than specified in statute
At least 95%
% of members which must agree to shorter notice period for AGM of public company than specified in statute
100%
4 resolutions requiring special notice
- Removal of director
- Resolution to appoint someone in place of director removed at that meeting
- Resolution to remove auditor
- Resolution to appoint new auditor
Who are considered ‘qualifying persons’ at GMs (3)
Member
Corporate Rep
Proxy of member
What is quorum for members meeting (unless specified otherwise by articles)? What are two exceptions?
Unless 2 present are 2 corp reps
-
If Ltd co with 1 member, 1 qualifying person is a quorum
Members Meeting - What will chair do if less than half in attendance raise hands on vote? Why?
Ask those who object to raise hands, as some may abstain and therefore do not count towards votes
PLC Model Articles state poll can be demanded by who? (4)
Chair
Directors
2 or more persons with right to vote
Member/s with 10% voting rights
Traded/quoted co. poll - S.341 provides following info must be placed on website:
Date of meeting
Text of resolution
Number of votes cast in favour
Number of votes against
3 possible ways a member might not have ability to vote
Non-voting shares
Restrictions placed by articles
Limited by statute (such as member/director voting on resolution to ratify negligence or breach)
How does a proxy decide how to vote?
Must vote in accordance with instructions given my member - if there are none, they vote as they wish
Define corporate representative
A person who has been authorised by a resolution of the directors of a company to represent the company at a meeting of a second company, of which the company is a member
Define proxy
A person appointed by a member to attend a meeting on their behalf
Which private companies are required to hold AGMs? (2)
If it is a traded company
or
It its articles so require
AGM period for traded company
Within 9 months of ARD
AGM period for PLC
Within 6 months of ARD
5 items of business typically arising at AGM
- Laying of accounts and various reports
- Approving remuneration report
- Approving appointment/reappointment of directors and auditor
- Declaration of final dividend
- Providing directors authority to engage in certain acts (such as re. shares)
When can a chair adjourn meeting under model articles? (4)
- If meeting is not quorate within half hour, or becomes inquorate
- If meeting contests to an adjournment
- If it appears that adjournment is necessary to protect safety of person in attendance, or to ensure business conducted in proper manner
- If directed to do so by the general meeting
Which records must be kept by companies for 10 years?
- Copies of all resolutions of members
- Minutes of all proceedings of general meetings
- Details of decisions taken by a sole member
When are class meetings held?
When a decision is taken that affects only a particular class of member
3 differences between rules for general meetings and class meetings
- Members and courts cannot call class meetings
- Quorum can be different, espec if class meeting is re. variation of class rights
- Any holders of shares can demand a poll at a class meeting
Can companies choose to hold fully electronic meetings?
Yes, so long as there articles do not rule this out
What was published to encourage institutional investors to engage more with companies?
UK Stewardship Code
3 examples of institutional investors
Insurance companies
Pension funds
Banks
