Conduct of a Company Meeting - quorum and proxies - Chapter 3 Flashcards
What is a quorum?
A quorum is the amount of people who must attend a meeting for it to be valid.
This is generally set as two as laid out by Sharp vs Dawes except for a few exceptions
a) a class meeting where one person holds all the shares
b) single member of a private company
c) by order of the court.
The articles of association fix the quorum otherwise companies act applies.
Does the act set out a quorum for both general and board meetings?
Older articles such as those based on the 1985 table a have a quorum of TWO QUALIFYING PERSONS (proxies or duly authorised representatives of a corporation are included) for general meetings.
The 2006 act does not set out a quorum for general meetings but it does for board meetings. Two proxies appointed by the same person will not suffice.
It is possible to adopt a special quorum such as a shareholder holds a prescribed minimum proportion of the issued share capital.
A class meeting is fixed by articles otherwise two people holding at least one third of the nominal value of issued shares.
Explain Sanitary Carbon Co 1877
One member who is present in dual capacity does not constitute a meeting.
However if the quorum is more than two people, one person in dual capacity can be counted in terms of the members who he represents as proxy.
Explain Henderson v Louttit 1894
This is where the articles must specify if proxies are included if not only members entitled to vote will be classed as a quorum.
Recokoning the quorum - Table A - When would a quorum entitlement restriction come into play?
a) a member holding only one class of shares may only have rights to vote on variants to that share so would only be counted as present for that business
b) on a resolution for the company to purchase its own shares by ‘off market’ purpose - the would be vendor may not
i) vote on a show of hands
ii) in voting on a poll, cast the votes attached to shares which is is to sell
He can however be counted in the quorum for that item of business and can vote against the resolution. If he votes in favour and the resolution is passed the resolution is ineffective
Do you need to maintain a quorum?
Yes in the 2006 act other than the appointment of a chairman there must be a quorum present for all business. (The appointment of the chairman is because a meeting is not automatically adjourned - a chairman must do it). In 1948 act it says ‘at the time when the meeting proceeds to business’ - probably a mistake but Hartley Baird Ltd 1955 shows that it is the case that for those articles people only must be present at the start of the business. (But the rule of two still applies as per law)
Explain Hartley Baird Ltd 1955
This was the case which proved that companies under the 1948 articles showed that the quorum only need be held at the start of the business.
The effect of inquorate meetings - what happens when a meeting is inquorate and are there any exceptions?
The proceedings are invalid and the 2006 articles show that the meting MUST BE ADJOURNED within half an hour of start time or if during the meeting it becomes inquorate.
If the chairman does not adjourn, the meeting will be dissolved so cannot be reconvened.
In older articles it is automatically deemed to be adjourned to the same day, time and place in the next week
The exception is that if the meeting called a general meeting and the meeting went ahead the fact it was invalidly called does not make the general meeting invalid.
Proxies - who is entitled to a proxy?
All companies have a statutory right to send a proxy. In the case with company’s with share capital you can send more than one.
What rights does a proxy have?
The proxy is just like a member and can
A) speak at general meetings
B) can be proxy to two people or a member of a company with share capital can send more than one proxy per item of business
C) vote on a share of hands (unless the articles exclude this)
D vote on a poll and request a poll
Has a duty to vote as instructed to
Don’t have right to see the minutes - class are treated same as general meetings.
A duly authorised representative isn’t a proxy
Why is there a statutory right to send more than one proxy (if a share capital company)?
This is to recognise the fact that shares if large plcs are often held in the name of nominee companies. Such nominee shareholders may represent more than one beneficial owner.
Form of proxy cards - isaacs v chapman 1916 - explain what this case showed?
This case showed that any form of proxy appointment is fine UNLESS the articles say otherwise - the act says all proxy notifications must be given in writing but this is classed as both hard copy and electronic.
What do model articles say the proxy form should contain?
A) name and address of member appointing proxy
B) the person who will be proxy and for what meeting
C) to be signed by or on behalf of the member
D) to be delivered to the company in accordance with the article and any instructions sent with the notice
What sort of proxy form does table A say should be issued?
Form of proxy
If you wish to attend the 1998 annual general meeting of baa but are unable to attend in person you may appoint a proxy to attend on your behalf.
Name xxx address xxx hereby appoint …the chairman of the meeting or …. (Delete as appropriate)
As my proxy to attend and, on a poll, vote on my belay at the AGM of baa plc on 23 April 1998 and any adjournment thereof
Please tell your proxy how to vote. If you do not include instructions your proxy may vote or abstain at their discretion including any other resolutions that may be posed at the meeting.
Res 1 report and accounts FOR AGAINST ABSTAIN
signature and date
To be valid this form must be signed and received at the address overleaf 48 hours before the meeting.
Completion of this form does not prevent a shareholder attending and voting in person in which case the proxy votes will be excluded.
Explain Harben v Philips 1883
This is the case with regard to proxies where the articles asked for a witness signature and it was held that forms which do not comply should be declared invalid
