Business Law

Question 1

What are the two types of decisions shareholders alone make?

Answer 1

1. decisions which shareholders alone make (e.g. changing the articles of association by SR)
2. decisions which give directors permission to do something (e.g. buy property from a director)

Question 2

When must a director not count in the quorum or vote of a board decision?

Answer 2

If it concerns a proposed transaction or arrangement that the director is interested in
NB: they can vote on other decisions and count in the quorum for other periods of that same meeting

Question 4

Can the prohibition on counting in the quorum or voting on personal interest-matters be disapplied?

Answer 4

Yes. It is under MA14, not a statutory prohibition

Question 5

Can the obligation for directors to declare personal interests be disapplied?

Answer 5

No. It is a statutory obligation.

Question 6

In what three scenarios does a director not need to declare a personal interest?

Answer 6

1. if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
2. if, or to the extent that, the other directors are already aware of it; or
3. if, or to the extent that, it concerns terms of a service contract that have been or are to be
   considered…by a meeting of the directors.

Question 7

How many directors must vote in favour in order for a written resolution to be passed?

Answer 7

All directors

Question 8

What are shareholders’ meetings commonly known as?

Answer 8

general meetings

Question 9

How are shareholders’ (general) meetings called?

Answer 9

By the board of directors passing a board resolution

Question 10

What is the minimum notice required for a general meeting?

Answer 10

14 clear days (+48 hours if post or email)

Question 11

What is the quorum for a general meeting?

Answer 11

two directors. (one if only one director)

Question 12

In what two situations are a shareholders’ vote effectively not counted?

Answer 12

1. a resolution to buy back some or all fo the shareholders’ shares
2. a resolution to ratify a directors’ breach (if that director is also a shareholder)

Question 13

Can a director, who is also a shareholder, vote at a general meeting where they have a personal interest?

Answer 13

Yes, because they would be acting in their capacity as a shareholder at the general meeting

Question 14

a poll vote may be demanded by: (four answers)

Answer 14

a) the chair of the meeting
b) the directors
c) two or more persons having the right to vote
d) a person or persons representing not less than 1/10th of the total voting rights (of all those entitled to vote on the resolution)

Question 15

what is a poll vote?

Answer 15

where the shareholders vote in a general meeting on the basis of one vote
for each share that they own, instead of the usual one vote per person.

Question 16

When can a general meeting be validly held on short notice for public companies?

Answer 16

• a majority in number of the company’s shareholders;
• who between them hold 95% or more of the company’s voting shares
  must consent.
  (NB: 90% for private companies)