Companies - Joint Decision Making

Question 1

What is an annual general meeting (AGM)?

Answer 1

A meeting of the members of a public company required to be held each calendar year

Question 2

How many clear days notice is required for an AGM?

Answer 2

21 days

Question 3

What is the maximum amount of time that should elapse between AGMs?

Answer 3

18 months

Question 4

What 5 things does an AGM cover?

Answer 4

1. Accounts
2. Directors and auditors reports
3. Dividends
4. Election of directors
5. Appointment and remuneration of the auditor

Question 5

What is a general meeting (GM)?

Answer 5

Any meeting of the company members that is not an annual general meeting

Question 6

When must directors call a general meeting?

Answer 6

If shareholders who represent at least 5% of the company’s paid-up share capital request a GM

Question 7

If shareholders request a meeting, directors must call it within __ ____ of the request and it must be held within __ _____

Answer 7

21 days, 28 days

Question 8

What are five features that notice of a general shareholder’s meeting must include?

Answer 8

1. Company name
2. Time, date and place of meeting
3. General nature of the business to be discussed
4. Statement of right to appoint a proxy
5. Special resolutions (full text)

Question 9

How do you calculate the latest date for notice of a meeting if the notice is hand delivered?

Answer 9

Meeting date minus 15 days

Question 10

How do you calculate the latest date for notice of a meeting if the notice is post delivered?

Answer 10

Meeting date minus 17 days

Question 11

How many clear days notice is required for general meetings?

Answer 11

14 days

Question 12

How can the notice period for general meetings be shortened?

(note - there’s a different percentage for public companies)

Answer 12

If agreed by a majority of shareholders who hold 90% of the shares for private ltd companies

(rises to 95% for non-traded public companies)

Question 13

Under the Model Articles, what is the quorum required for a shareholder meeting?

Answer 13

2 shareholders

Question 14

What is the difference between ordinary resolutions and special resolutions?

Answer 14

Ordinary - require approval of at least a majority (51%) of members at the meeting

Special - require approval of 75% or more of members at the meeting

Question 15

What is a poll vote?

Answer 15

Where members of meetings gets one vote per share

Question 16

The Companies Act 2006 provides that provision in the Articles are invalid if it restricts what 2 groups of people demanding a poll vote?

Answer 16

1. 5 or more shareholders; or
2. Shareholders with not less than 10% of voting rights/paid up capital

Question 17

What are written resolutions?

Answer 17

An ordinary or a special resolution that is passed in writing as oppose to in a meeting

Question 18

Can written resolutions be used to dismiss a director or auditor?

Answer 18

No

Question 19

Which two groups of people can decide whether to circulate a written resolution?

Answer 19

1. The board of directors
2. Shareholders with at least 5% of total voting rights

Question 20

How many days from the day of circulation of a written resolution will the resolution lapse?

Answer 20

28 days

Question 21

Written resolutions are based on all ____________ entitled to vote and is based on one vote per _____

Answer 21

shareholders, share

Question 22

The Companies Act 2006 prohibits the use of written resolutions by which type of companies?

Answer 22

Public limited companies

Question 23

Give five examples of matters requiring approval by ordinary resolution

Answer 23

1. Appointment/removal of a director
2. Approval of declaration of dividends
3. Approval of director’s decision to allot shares of a new class
4. Ratification of director’s breach of duty
5. Entering a service contract with a director for 2+ years

Question 24

If the term of a director’s service contract is less than 2 years, who can appoint a new director and award their service contract?

Answer 24

The board

Question 25

The model articles of association provide that the payment of a __________ must be recommended by the board of __________ before it can be declared by the shareholders by an _______ resolution.

Answer 25

dividend, directors, ordinary

Question 26

A shareholder wanting to propose a resolution to remove a director must give the company how many days notice of their intention?

Answer 26

28 days

Question 27

What is a substantial property transaction (SPT)?

Answer 27

Where a director buys property from or sells property to the company with a value of at least £100,000 or exceeds 10% of the company’s asset value

Question 28

What type of resolution is required to approve a SPT?

Answer 28

Ordinary resolution

Question 29

What is the de minimis value of a property that will not be considered an SPT meaning shareholder approval is not required?

Answer 29

£5,000

Question 30

Can a director who is a shareholder vote in a general meeting where approval of the SPT is considered?

Answer 30

Yes

Question 31

Do SPTs apply where the person who is selling/buying the property is a shareholder?

Answer 31

No - provided they’re not also a director

Question 32

Give six examples of matters requiring approval by special resolution

Answer 32

1. Buy back company shares
2. Changes to Articles of Associations
3. Changing the company name
4. Winding up the company
5. Reducing the company’s share capital
6. Disapply pre-emption rights