Company decision making

Question 2

Who is the standard-day-to-day running of a business conducted by?

Answer 2

The directors. Unless the power to take particular decision has been delegated by the board to a particular director or committee of directors.

Question 3

When will a matter need to be referred to the company’s shareholders?

Answer 3

1. a matter outside of the powers of the directors which must be effected by a resolution of the shareholders e.g. amending the articles.
2. a matter within the powers of the directors but requires the approval of shareholders before the directors can be authorised to act e.g. making a loan to a director.

Question 4

How are decisions of the directors taken?

Answer 4

By board resolution at a board meeting.

Question 5

How many votes does a director have in board resolutions?

Answer 5

One each

Question 6

How are board resolutions normally passed?

Answer 6

By simple majority unless the directors have agreed a decision requires unanimity

Question 7

How are decisions of the shareholders taken?

Answer 7

By passing shareholder resolutions at general meetings or in writing (for private company only)

Question 8

What are the two types of shareholder resolutions?

Answer 8

A ordinary resolution or a special resolution.

Question 9

What is an ordinary resolution?

Answer 9

Passed by a simple majority of over 50%

Question 10

What are special resolutions?

Answer 10

Passed by a majority of 75% or over.

Question 11

What are the two ways shareholders can vote at a GM?

Answer 11

On a show of hands or poll vote.

Question 12

What does it mean that a shareholder can appoint a proxy?

Answer 12

A proxy can exercise all or any of their rights to attend, speak and vote at any GM.

Question 13

How many votes does each shareholder have on a show of hands?

Answer 13

1 each regardless of how many shares they hold (provided the share has voting rights under the Articles)

Question 14

How many votes does a shareholder have on a poll vote?

Answer 14

One vote in respect of each share.

Question 15

Where can the conditions for demanding a poll be found?

Answer 15

CA 2006 but they can be relaxed by provisions in the Articles.

Question 16

What does MA state in respect of when a poll vote can be demanded?

Answer 16

It can demanded before the GM or at the GM before a show of hands or immediately after the result of that vote.

Question 17

What does the MA Articles state in respect of who can demand a poll vote?

Answer 17

• the chairperson of the meeting
• the directors
• two or more persons having the right to vote at that resolution
• a person or persons representing at least 10% of the total voting rights of all the shareholders entitled to vote.

Question 18

What company can pass a shareholder resolution by written resolution?

Answer 18

Only private companies.

Question 19

How many votes does a shareholder have in a written resolution?

Answer 19

One vote in respect of each share held by them

Question 20

When can a written resolution not be used?

Answer 20

Cannot be used to remove a director or auditor.