Company Decision Making Flashcards
Overview of how companies make decisions
Who makes the standard day-to-day decisions of a company?
The directors
When would a matter be referred to shareholders for a decision?
Two options:
- it is outside the powers of the directors
- within power of directors but requires the approval of shareholders
Where may shareholder resolutions be passed?
Either at a general meeting or by written resolution
When can written resolutions not be used? Three circumstances
- If it is not a private company
- resolution is to remove a director
- resolution is to remove an auditor
What is meant by show of hands voting?
Each shareholder who is present and voting at the general meeting is entitled to one vote
What is meant by poll vote?
Each shareholder has one vote in respect of every share held by them
Who can demand a poll vote?
Under MA 44
- chair
- directors
- two or more persons entitled to vote on the resolution
- a person or persons representing at least 10% of the total voting rights of all shareholders entitled to vote on the resolution
What is the voting rights under a written procedure?
Each shareholder has one vote in respect of each share held by them.
All shareholders are included in the vote, whether they vote or not.
Abstention is treated as a vote against.
What is needed to pass a written ordinary resolution?
A simple majority of the total voting rights of all eligible shareholders.
What is needed to pass a written special resolution?
- It must state that it is a special resolution
- Must be passed by members representing not less than 75% of total voting rights of eligible members
What is needed to pass an ordinary resolution at a GM?
More than 50% of members present and voting need to vote in favour to pass the resolution.
What is need to pass a special resolution at a GM?
75% or more member present and voting need to vote in favour to pass the resolution.
