Company Decision-making, Company's Officers and Shareholders Flashcards
Which decisions can shareholders alone make?
- Changing the articles of association
- Changing the name of the company
Once the shareholders have made the decision to change articles of association / company name, can the directors reverse the decision?
No and they must ensure that the correct paperwork is completed and Companies House is notified
Which decisions can the shareholders give the directors permission to make?
- Entering into certain types of contracts which carry particular risks for the company
- Where the directors could potentially use their position to benefit personally from the contract
How do directors make decisions?
Board meetings and any decisions made are board resolutions
How do directors give notice of board meetings and what is required?
- Notice must be reasonable
- It does not need to be in writing
- It needs to include time, date and place
- If it is to be held separately (eg teams) then this needs to be communicated
What is the quorum of a board meeting?
Two directors must be present at all times
If a director has a personal interest in a proposed transaction or arrangement, what must they declare?
The nature and extent of this interest to the board
When can a director not count in the quorum of two?
- If the director is concerned with an actual or proposed transaction or arrangement with the company
- in which the director is interested
When does a director NOT need to declare their interest in a proposed transaction or arrangement with the company?
- If it cannot be reasonable regarded as likely to give rise to a conflict of interest
- If, or to the extent that the other directors are already aware of it
- If, or to the extent that it concerns terms of a service contract that have been or are to be considered by a meeting of the directors
Can a company disapply the rule of a director not counting in the quorum due to a personal interest?
Yes
How is voting carried out in a board meeting?
- Simple majority
- By a show of hands
- Each director has one vote
- If the board has appointed a director to act as chair, they will have one extra vote in the event of a tie (only used in the event that the casting vote is to be used in favour)
Do directors HAVE to call board meetings?
No, a board resolution can be passed in the form of writing or other method if all directors have indicated that it is a unanimous decision
How many shareholders need to vote for an ordinary resolution to pass?
Over half of the votes cast at a shareholders general meeting
How many shareholders need to vote for a special resolution to pass?
75% or more of votes cast at a shareholders general meeting
How is a shareholders general meeting called?
Board of directors pass a board resolution
How often to public and private companies have to hold a general meeting?
- Public companies: at least one a year
- Private companies: no rule