Chapter 14 - MEETINGS OF MEMBERS AND SHAREHOLDERS

Question 1

What principle describes all members having the right to attend and vote at a general meeting
of the company?

Answer 1

Duomatic principle

Question 2

Can members decisions be made by written resolution?

Answer 2

YES, but not always (despite most Company Articles allowing for this).

The CA2006 reversed this position and the presumption is that for private companies written resolutions will be the preferred option, under the detailed provisions in CA2006, with the need to convene physical meetings reserved for the few resolutions that are not permitted to be approved by written resolution or where the number or make-up of members makes obtaining their approval too
difficult.

Question 3

The members of a private company may pass any resolution that could be put to a general meeting by written resolution
(CA2006 ss. 282, 283, 288) except for resolutions to remove what two roles?

Answer 3

• remove a director under CA2006 s. 168; and
• remove an auditor under CA2006 s. 510.

Question 4

Can any member request that a resolution be circulated?

Answer 4

No. The member or members must hold between them not less than 5% of the voting rights at a general meeting

Question 5

Who has the right to exercise the voting rights on a written resolution?

Answer 5

The registered member

Question 6

On what basis can members of a public company approve a resolution other than at a general meeting?

Answer 6

By proxy or by unanimous written resolution under the duomatic principle

Question 7

Under what circumstances must a private company hold an AGM?

Answer 7

If it is a quoted company or required by its Articles

Question 8

What additional resolutions would a quoted company routinely add to its AGM notice?

Answer 8

Receipt of directors’ remuneration report, approval of directors’ remuneration policy (triennial), authority to issue shares, waive pre-emption rights on allotment, authority to purchase own shares, approval of political donations, and authority to
convene general meetings on 14 days’ notice

Question 9

Which documents should be available for inspection by members at an AGM?

Answer 9

Register of members
Directors’ service contracts
Notice

Question 10

Are amendments to resolutions allowed?

Answer 10

For ordinary resolutions only to correct obvious typographical mistakes, no amendments may be made to a special
resolution

Question 11

Can members ask questions about anything?

Answer 11

At a general meeting any question relating to the business of the meeting, at the AGM of a quoted company questions may be raised on any topic, however, directors only need to ensure that questions relating to the business of the meeting
are answered

Question 12

What does clear days mean?

Answer 12

Clear days excludes the date the notice of a meeting is given, or deemed given, and the date of the meeting

Question 13

What must a traded company have done to allow members’ meetings to be held on 14 days’ notice?

Answer 13

Obtained consent at the previous AGM or a general meeting held since the previous AGM

Question 14

Do notices of general meetings need to distinguish between ordinary and special resolutions?

Answer 14

Yes

Question 15

If one of two members refuses to attend general meetings can a meeting be held?

Answer 15

Under the Model Articles no but check the Articles

Question 16

What is the key difference between an ordinary and a special resolution of the members?

Answer 16

Ordinary resolution is approved by a simple majority and a special resolution requires a 75% majority

Question 17

What advantage does passing a resolution at a meeting have compared to the same resolution circulated as a written resolution?

Answer 17

At a meeting the majority is of those voting and on a written resolution it is of the entire voting share capital

Question 18

Can proxies speak at meetings?

Answer 18

Yes

Question 19

Who has authority to adjourn a general meeting?

Answer 19

The chair

Question 20

What options does a corporate member have in order to cast their vote at a general meeting?

Answer 20

Appointment of corporate representative or appointment of a proxy

Question 21

What is the maximum period before a general meeting for the cut-off for the receipt of forms of proxy by the company?

Answer 21

48 hours (excluding non-working days)

Question 22

How many proxies can an individual member appoint?

Answer 22

As many as they like but proxies must represent different shares

Question 23

Can proxies vote both for and against the same resolution?

Answer 23

Only if they represent different members or different shares of the same member

Question 24

If a member’s proxy does not attend the meeting are their votes still counted as recorded on the proxy appointment form?

Answer 24

No

Question 25

What, if any, are the practical differences between voting on a show of hands and on a poll?

Answer 25

On a show of hands each member has one vote on a poll each member has the number of votes attached to their shares – usually one vote per share

Question 26

Must a chair always call for a poll?

Answer 26

If a poll is validly demanded by members, yes, in other circumstances the chair has discretion but does have a duty to ensure that the sense of the meeting is correctly recorded

Question 27

If an abstention is a not a vote, why do some members insist on ensuring their abstention is recorded?

Answer 27

To demonstrate dissatisfaction

Question 28

In order to constitute a valid meeting, what must all attendees be able to do?

Answer 28

Participate in the meeting, to hear the speakers and to be able to ask questions

Question 29

How has digital voting promoted the use of poll voting as a matter of course?

Answer 29

Expediency - Digital technology has enabled almost instantaneous vote count whereas a manual count can take hours

Question 30

Except for a traded company that is a private company, private companies are no longer required to hold an annual general meeting (CA2006 s. 336(1A)).

What is a traded company?

Answer 30

A traded company is a UK incorporated company with its shares admitted to trading on either a UK regulated market or an EU regulated market. The shares admitted to trading must carry voting rights at a general meeting.

Question 31

When must a public and a private (traded) company hold its AGM?

Answer 31

Every public company and every private company that is a traded company must hold an annual general meeting within the period of six months (nine months for a private traded company) commencing on its accounting reference date
(CA2006 s. 336).

Question 32

Do directors have general authority to convene general meetings, including AGMs?

Answer 32

Yes CA2006 s302

Question 33

What are the SIX routine business items of an AGM for a quoted company?

Answer 33

The following is the routine business of an annual general meeting:
* Receiving the report and accounts laid before the meeting, as required by CA2006 ss. 437–8.

• The declaration of a final dividend, if any.
• The election or re-election of directors. (This will include both the election of directors who have been appointed since the last AGM and the re-election of directors who have retired by rotation, as required by the company’s Articles, the Act or the Governance Code.)
• The reappointment and remuneration of the auditors.
• Quoted companies must put a non-binding resolution at the meeting that receives the audited accounts for the approval of the directors’ remuneration report (CA2006 s. 439).
• Quoted companies must put a resolution at the meeting that receives the audited accounts for the approval of the directors’ remuneration policy at intervals of not more than three years or to approve the adoption of a new remuneration policy (CA2006 s. 439A).

Question 34

Under what 3 circumstances (per the Model Articles) can a poll be demanded at an AGM?

Answer 34

Model Article 44 (public company Model Article 36) provides that a poll may be demanded by at least
two persons (e.g. members or proxies) with the right to vote on the resolution.

A poll may also be demanded by members representing at least 10% of the voting rights or
members having at least 10% of the shares with voting rights.

The chair of the meeting or the directors may also demand a poll.

Question 35

Special notice must be given to certain ordinary resolutions. What is the notice period and what are the resolutions?

Answer 35

28 Days

remove an auditor before the expiration of their term of office

remove (and appoint in their place) a director prior to the expiration of their term

Question 36

Model Articles Plc reg. 33, Ltd reg. 41, require that, if a general meeting quorum is not present within ____________, the chair must adjourn the meeting and must either specify the time and place for the adjourned meeting, or state that the meeting will continue at such time and place as the directors may decide.

Answer 36

30 minutes

Question 37

What are two of the four usual items of bsuiness that must be dealt with by special resolution?

Answer 37

• alteration of the Articles (CA2006 s. 21);
• change of name (CA2006 s. 77);
• disapplication of pre-emption rights (CA2006 s. 571); and
• reduction of capital (CA2006 s. 641).