Ch 15 - Company Meetings Flashcards
What companies are required to hold an AGM under the Companies Act 2006?;
Only public companies are required to hold AGMs, a private company does not have to hold an AGM.
When does a company have to hold its AGM?;
Public companies must hold it within six months of their year end and not more than 15 months may elapse between meetings (Section 582 CA 2006).
What notice is a company required to give its shareholders to call an AGM and what details must be included
in this notice?;
Notice of AGM: all shareholders must receive 21 days clear notice of the AGM, specifying that the meeting is
an AGM, the time, date and place of the meeting
What business is generally dealt with at an AGM?;
General business of the AGM: (1) consideration of the accounts, (2) consideration of the Director’s and
Auditor’s reports, (3) declaration of a dividend, (4) retirement by rotation and re-election of Directors, and (5)
re-appointment/appointment of the Auditor
By what methods is voting effected at an AGM?
Voting at meetings is governed by a company’s Articles of Association.
The general rule is that it takes place first by a show of hands – one vote may be given by each member
present in person, including proxies and a result is declared by the chairperson of the meeting. This
declaration is deemed conclusive.
The main disadvantages of voting by a show of hands is that:
(i) there is no privacy – everybody sees how you vote;
(ii) it does not reflect shareholdings (one hand regardless of how many shares you have);
(iii) it can be inaccurate (as no actual count is taken).
After a show of hands a poll can be demanded (secret ballot) by:
(i) not less than five members;
(ii) members representing not less than 10% of total voting rights;
(iii) members holding shares that represent not less than one tenth of the paid up capital.
The results of the poll take precedence over show of hands. Poll voting depends upon number of shares
held by the shareholder.
The disadvantage of the poll is that it is more time consuming and administrative in nature albeit more
accurate.
The right to conduct a poll cannot generally be excluded by the Articles.
The two types of written resolution that a company may pass and the type that must be passed to change the
Articles of Association
Written special resolution and written ordinary resolution - company must pass a special written resolution
(Sections 281-283 CA 2006).
The two persons who can propose a written resolution to change Articles of Association;
Persons who can propose a written resolution are (1) directors (2) shareholders with a 10% shareholding.
What information must a written resolution contain?
The written resolution must include a statement informing members how to signify agreement and that date
by which the resolution must be passed.
In what two business decisions can they not use this type of resolution and must call a general meeting;
A written resolution cannot be used for any decision to (1) remove a director before the expiry of his term in office or (2) to remove an auditor before the expiry of his term in office.
Discuss the main three differences between ordinary resolutions and special resolutions
Resolutions: the main differences between an ordinary and a special resolution are:
(i) how it is passed (ordinary requires a majority whereas a special requires 75%);
(ii) registrar (ordinary does not need to be registered whereas all special must be delivered to the Companies
Registry within 15 days, otherwise the company is liable to the imposition of a fine).
Give examples of a matter that can be passed by an ordinary resolution.
Ordinary resolution matters to be voted on (any one of the following) (Section 282 CA 2006):
(i) consideration of the company’s financial statements;
(ii) election, re-election or removal of directors;
(iii) appointment or removal of an auditor;
(iv) remuneration of auditors;
(v) declaration of dividends.
Give one example of a matter that can be passed by a special resolution.
Special resolution matters to be voted on (any one of the following) (Section 283 CA 2006):
(i) change to the company’s constitution (Articles of Association);
(ii) change of company name;
(iii) reduction of the share capital of the company;
(iv) re-registering a company from private to public.
What is the role of the Chairperson at company meetings;
Chairperson
(i) Responsible for running the meeting and ensuring that the meeting covers all the topics on the agenda;
(ii) Oversees voting at meetings;
(iii) Signs the minutes of previous meetings and once signed they are prima facie records of those meeting;
(iv) Ensures that the meeting is quorate;
(v) Maintains order during the meeting and have the power to dissolve or adjourn the meeting if it becomes
disorderly.
What are the rules regarding quorums at meetings;
Quorum
This is the minimum number of people that must attend a meeting in order for it to be valid. A company’s
quorum is generally stated in its Articles of Association.
The statutory minimum in public and private companies is two persons. The quorum may be present in
person or by proxy.
If there is no quorum within 30 minutes of the commencement of the meeting, then the chairperson must
adjourn the meeting to a later date.
The meaning of the term ‘proxy’ and the rules regarding appointment.
This is both a document appointing and the appointment of a person to attend, vote, and speak on behalf of
another shareholder at a meeting.
Company law (Sections 324-327 CA 2006) requires that the form nominating a person as proxy must be
received by the company at least 48 hours prior to the meeting.
Proxies only apply to a company having share capital.
The ability to appoint a proxy must be authorised by the Articles of Association.
