Business: Unit 4 - Shareholders and Directors

Question 1

Directors Made Decisions

What is rule (MA 11)

A quorum of two directors must be….

Answer 1

…..present at all times during a board meeting.

Question 2

Directors Made Decisions

Rule (MA 14)

A director may not count in the quorum or vote if a proposed decision of the board is:

Answer 2

• concerned with an actual or proposed transaction or arrangement with the company
• in which a director is interested

Question 3

Directors Made Decisions

Rule (s 177 CA 2006)

Where a director has a personal interest in a proposed transaction or arrangement with the company, they must ….

Answer 3

declare the nature and extent of this interest to the board.

Question 4

Directors Made Decisions

Rule (MA 7)

Board resolutions are passed by ….

Answer 4

a simple majority, which means that over half of those present must vote in favour in order for the board resolution to be passed.

Question 5

Shareholders’ resolutions

Rule (s 282 CA 2006)

For an ordinary resolution to be passed….

Answer 5

over half of the votes cast at a shareholders’ general meeting must be in favour of the resolution.

Question 6

Shareholders’ resolutions

Rule (s 283 CA 2006)

For a special resolution to be passed,….

Answer 6

75% or more of votes cast at a shareholders’ general meeting must be in favour of the resolution.

Question 7

Shareholders’ resolutions

Rule (s 307 and s 360 CA 2006)

The minimum notice required for a general meeting is

Answer 7

14 clear days.

Question 8

Shareholders’ resolutions

Rule (s 318 CA 2006)

Answer 8

Subject to the company’s articles, the quorum of a general meeting is two.

Question 9

Shareholders’ resolutions

Rule (s 307(5)– (6))

Answer 9

For a general meeting to be validly held on short notice:
• a majority in number of the company’s shareholders;
• who between them hold 90% or more of the company’s voting shares must consent.

This percentage is increased to 95% for public companies.

Question 10

Shareholders’ resolutions - Alternative to general meeting

S 288 CA 2006

Answer 10

the shareholders pass a resolution or resolutions by way of a written resolution - permitted under s 288 CA 2006 for private companies, but not for public companies).

Question 11

Shareholders’ resolutions

Rule (s 296 CA 2006)

Answer 11

Written resolutions are passed when the required majority of eligible members have signified agreement to the resolution.

Each shareholder has one vote for each share.

Question 12

Shareholders’ resolutions

Rule (s 292 CA 2006)

A shareholder or shareholders who have 5% or more of the voting rights in the company are entitled to ….

Answer 12

require the company to circulate a written resolution

Question 13

Shareholders’ resolutions

s 303 CA 2006

Answer 13

The shareholders can require the directors to call a general meeting.

The directors are required to call the general meeting once they have received requests to do so
from shareholders representing at least 5% of such paid- up capital of the company as carries the right of voting at general meetings (s 303(2)(a)

So the maximum period of time from the shareholders requesting the board to call a general
meeting and the general meeting itself is seven weeks.

Question 14

Directors role

(s 394 CA 2006).

It is the directors’ responsibility to ensure that ….

Answer 14

accounts are produced for each financial year.