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Corporate Secretarial Practice > Chapter 9: Members' Meetings and Resolutions > Flashcards

Chapter 9: Members' Meetings and Resolutions Flashcards

1
Q

Which companies must hold an AGM?

A

All public limited companies

Private limited companies (if set out in the articles)

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2
Q

At what time must an AGM be held?

A

Within 6 months of the financial year end.

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3
Q

What is a quorum according to s 318 CA?

A

Two members personally meeting is a quorum, unless the articles provide otherwise. For a company with a single member, the quorum is one.

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4
Q

Who may act as chairman of a meeting (s319 CA)?

A

Any member elected by the members subject to the articles

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5
Q

How are votes distributed among members? (s284 CA)

A

Every member has one vote per share, or one vote per £10 of stock.

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6
Q

When may members requisition a meeting? (s303 CA)

A

When they hold 5% of issued share capital (or 5% voting rights for a guarantee company).

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7
Q

How may notice of a meeting be given? (s308 CA)

A

In hard copy
In electronic form
By means of a website
A combination of methods

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8
Q

What is the purpose of the AGM?

A
  • directors to report on the performance of the company
  • members to question directors about the company
  • members to vote on resolutions
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9
Q

What 5 matters are typically covered by the AGM?

A

1 Receive the report and accounts
2 Seek approval for directors’ remuneration policy (for listed companies)
3 Declare final dividend
4 Elect the directors who have been appointed since last AGM, and re-elect those who have retired by rotation
5 Appoint or reappoint auditors and determine their remuneration

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10
Q

What steps should the CoSec take in planning the AGM?

A
  • check date complies with statutory 21 days
  • check date is not more than 6 months from end of accounting date (for PLC)
  • if listed, check compliance with 20 working days notice period in UKCGC
  • check other events on same date
  • book venue
  • check board has agreed to convene meeting and approved notice of meeting
  • are annual report and accounts finalised and printed
  • have you informed interested parties such as auditors, and investors?
  • is listed, do arrangements comply with listing rules and UKCGC?
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11
Q

When can members add items to the agenda of a general meeting?

A
  • one or more shareholders holding at least 5% of the voting capital
  • not less than 100 shareholders holding average paid-up shares of at least £100 each
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12
Q

What will the board typically do on receiving a resolution for the AGM from a member?

A

They typically will not agree, and will provide their view on the resolution in a statement, and a recommendation to vote against it.

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13
Q

When is the board not required to circulate a resolution from a member?

A

If the request is ineffective, defamatory, frivolous or vexatious.

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14
Q

What does s 314 CA allow members to do relating to general meetings?

A

Request circulation of a statement of up to 1000 words relating to a propose resolution or any other business at a general meeting.

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15
Q

What is the only business that may be transacted at a general meeting?

A

The business specified in the notice convening the meeting.

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16
Q

How often must general meetings (not AGMs) be held?

A

As often as the directors wish

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17
Q

In what situations MUST directors call a general meeting?

A
  • when auditor resigns stating that there are matters that should be brought to the attention of creditors
  • when a plc’s net assets are half of called-up share capital.
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18
Q

Who may requisition the directors to hold a general meeting?

A

Members holding not less than 5% of paid-up voting share capital.

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19
Q

When must a company circulate a statement by members resolutions or other matters?

A

If requested by:

  • one or more shareholders holding at least 5% voting capital
  • not less than 100 shareholders holding shares on which an average of not less than £100 has been paid up.
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20
Q

Must a company send notice of meetings in hard copy?

A

No, electronic communication is acceptable where members have agreed, or where they have failed to opt out.

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21
Q

What is the notice period for a general meeting under s 360 CA?

A

14 days, except PLC AGMs, which is 21 days.

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22
Q

Can the articles change the notice period for meetings?

A

Yes, but only extend, cannot shorten.

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23
Q

When is an electronic communication deemed to be delivered?

A

48 hours after sending

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24
Q

To which members should meeting notice be sent?

A

Every member, unless the articles allow otherwise (e.g. for non-voting shares)

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25
Q

Does accidental failure to deliver notice invalidate a meeting?

A

No, as long as it can be proven that failure to deliver was accidental.

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26
Q

How may the AGM notice period for a plc be reduced?

A

My unanimous consent of those entitled to attend.

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27
Q

How many the notice of a private limited company general meeting be shortened?

A

By consent of 95% of members.

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28
Q

What information should be included in notices of general meetings?

A
  • date, time and place of meeting
  • whether it is an AGM or other general meeting
  • a summary of the business to be transacted
  • the full text of special resolutions to be put before the meeting and any special notice.
  • explanation of the right to appoint proxies
  • name and signature of the secretary issuing the notice
  • any explanatory notes necessary to understand the business conducted.
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29
Q

What additional information must be placed in meeting notices according to the listing rules?

A
  • clear and adequate explanation of the subject matter
  • a notice drawing members’ attention to the importance of the document
  • where voting is required, a voting recommendation from the directors
  • a notice advising members that if their shares have been sold or transferred, the circular should be passed to the purchaser.
30
Q

What 3 requirements in the UKCGC relate to AGMs?

A
  • issue AGM notice with at least 20 days
  • make constructive use of AGMs
  • publish proxy figures
31
Q

What should an AGM checklist for the CoSec contain?

A
  • does the notice state it is an AGM, place, date and time?
  • does the notice contain resolutions that can be implemented?
  • does the notice indicate the authority under which it is being given?
  • are special resolutions properly identified
  • are proxy rights explained?
  • have explanatory notes been included?
  • has the proper notice period been given?
32
Q

What is a quorum?

A

The minimum number of persons necessary for the transaction of business.

33
Q

Who is a “qualifying person” for the purposes of a quorum?

A
  • an individual who is a member of the company
  • a representative of a corporation
  • a proxy of a member
34
Q

What is stated in Model Articles 41 regarding quorum?

A

If a quorum is not present within 30 minutes, the meeting may be adjourned.

35
Q

Does a quorum need to be maintained throughout the entire meeting?

A

Yes, unless the articles provide otherwise.

36
Q

In what circumstances may one person form a quorum?

A

1 For a single member company

2 If the court has ordered a quorum of one (e.g. other members are refusing to attend meetings.

37
Q

Who should decide the content and presentation of the agenda?

A

The chairman with assistance from the secretary.

38
Q

What is the purpose of an agenda?

A

To provide a directing force, and avoid aimless discussion.

39
Q

How should the chairman’s agenda differ from the copy issued to meeting attendees?

A

It should contain notes on the background to items to allow the chairman to conduct the meeting with tact and authority.

40
Q

Whose role is it to ascertain “the true sense of the meeting”?

A

The chairman

41
Q

How do a member’s voting rights differ between voting on a show of hands, and voting on a poll?

A

On a show of hands, votes are one per member. On a poll, votes are one per share.

42
Q

According to Model Article 27 (plc), can a person entitled to a share via bankruptcy or death attend a meeting and vote?

A

Only once they have been registered as the new holder of the shares.

43
Q

What does Model Article 41 (plc) state will regard to monies outstanding on shares?

A

No holder can vote if monies are outstanding on shares.

44
Q

Which section CA allows appointment of a proxy?

A

S 324

45
Q

How soon before a meeting must a proxy be appointed?

A

No later than 48 hours

46
Q

What will happen if a member attends the meeting and has already appointed a proxy?

A

The member’s presence cancels the authority given to the proxy.

47
Q

Which companies must circulate proxy cards prior to meetings?

A

Listed companies.

48
Q

What form do proxy cards usually take?

A

A foldable page of the AGM pack, or a postcard-style. Either of which can be easily posted back to the company.

49
Q

What are one-way, two-way and three-way proxies?

A 
One-way = appoint a person by do not tell them how to vote
Two-way = appoint a person and direct them how to vote
Three-way = include an option to withhold vote.
50
Q

Who is usually the default proxy?

A

The chairman of the meeting

51
Q

How many proxies can a member appoint?

A

One per share

52
Q

What is a poll at a meeting?

A

A written vote

53
Q

Who may demand a poll? (4)

A
  • the chairman
  • at least two persons entitled to vote
  • a person or persons representing no less than 10% of total voting rights
  • a member or members representing no less than 10% paid up share capital
54
Q

How quickly must a poll be taken following demand for one? (Note - difference for Ltd v Plc)

A

Model Article 44 (Ltd) - poll must be taken immediately

Model Article 36 (plc) - within 30 days of demand.

55
Q

What steps should a CoSec take to prepare for a poll?

A
  • prepare a report of proxies in favour of the chairman, including numbers for and against
  • have a separate report for any persons other than the chairman
  • elect scrutineers who will be called if a poll takes place
  • agree the method scrutineers will use
  • prepare ballot papers
  • draft an announcement for chairman on procedure for polls
56
Q

What three types of voting are available on a poll?

A

1 Voting lists - a “for” list and “against” list, against which each person writes their name
2 Ballot papers - individual papers distributed to members
3 Electronic voting - using handheld devices

57
Q

What additional requirements are placed on listed companies for disclosure of results of resolutions?

A

Listing rules require:

  • results of votes must be disclosed to the Stock Exchange via RIS
  • results of polls made available on website
58
Q

Who may demand an independent report on a poll?

A

Members holding 5% voting rights or 100 members holding shares of average value over £100 nominal value.

59
Q

What is the role of an independent assessor on a poll?

A

State whether:

  • procedures for poll were adequate
  • votes were fairly and accurately counted and recorded
  • validity of proxy appointments was fairly assessed.
  • company complied with CA 2006 regarding proxies (ss 325, 326)
60
Q

When must the chairman adjourn a meeting according to Model articles 41 (plc 33)?

A

If within half an hour, a quorum is not present, or if a quorum ceases to be present.

61
Q

When does the chairman have the discretion to adjourn a meeting?

A

The meeting consents or directs him to adjourn.
It appears that an adjournment is necessary to protect the safety of any person or to ensure business is conducted in an orderly manner.

62
Q

What must the chairman do if a meeting is adjourned?

A
  • specify the time and place to which it is adjourned

- have regard to any time/place suggestions given by the meeting

63
Q

What must a company do if an adjourned meeting is to take place more than 14 days later than the original?

A

Give 7 days clear notice.

64
Q

Where should minutes be kept?

A

At the registered office, open for inspection to members.

65
Q

What is a resolution?

A

A formal way in which a decision is proposed and passed at a meeting.

66
Q

To who must listed companies send two copies of resolutions that have been passed?

A

UKLA (via the NSM)

67
Q

What 4 types of resolution may be passed at general meeting?

A
  • ordinary
  • special
  • ordinary with special notice
  • extraordinary
68
Q

Can a resolution requiring special notice be passed with short notice by all members’ agreement?

A

No, full notice period is always required.

69
Q

When may an ordinary resolution be changed according to Model Article 47?

A

If the change is given in writing no less than 48 hours before the meeting, and does not materially alter the scope of the resolution.

70
Q

Which sections CA allow private companies to pass written resolutions?

A

288-300

Corporate Secretarial Practice (20 decks)

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