Conduct Of A Company Meeting - Voting -chapter 3 Flashcards
Do all ordinary shares allow a vote?
There shouldn’t really be but some companies do offer some shares
A) don’t offer any voting rights
B) rights only on specified issues
C) allocate votes on a weighted basis - weighted shares can effectively mean that the articles can’t be changed or a director can never be removed from office. (As shown in bushell v faith 1970 where his sisters could not remove mr faith from being a director due to weighted votes)
How might articles (such as table a) lay out voting rights?
Subject to any restrictions, on a show of hands each member shall be entitled to one vote and in a poll every member shall have one vote for every share.
Always look at the articles!
What are the standard methods of taking a vote at a general meeting?
By a show of hands or a poll. The act does not say it needs to be done by show of hands but it does say members or proxies can demand a poll.
The ARTICLES would lay out the procedure or the act applies. some large companies now move straight to a poll.
General rules are
1) on a vote on a written resolution
A) if company has share capital each member has one vote in respect of each share or £10 of stock held by him
B) in any other case every member has one vote
2) show of hands one person one vote
3) a poll at a meeting
A) each share or each £10 stock
B) in any other case member has one vote
4) this section overrides the articles
5) nothing in this section restricts the rights of proxies etc. - proxy get to vote and can represent two people voting different ways. And corporate representative can have one vote
Explain Nell v Longbottom 1894
Chairman casting vote (vote in addition to his own)
In this case it was found that the chairman could not rule in favour of a casting vote being allowed - simply no decision can be take so the resolution is lost. NO CASTING VOTE UNLESS ALLOWED IN THE ARTICLES
Explain Weakley v Auew 1975
The chairman cannot assume the right to a casting vote.
The 2006 articles do not include a casting vote. Traded company articles giving a casting vote will probably be ineffective due to this.
What is the definition of a quorum?
A quorum may be defined as a minimum number of persons to be present at a meeting (or their proxies if permitted) which the articles require to be present in order that the business of the meeting may be validly transacted.
Who may demand a poll?
All members, proxies, directors and chairman. Can be demanded before a meeting.
What are the advantages and disadvantages of voting by both show or hands and a poll?
Show of hands is quick to ascertain whether a resolution is carried. Main disadvantage is does not take account of proper voting rights of members.
For a poll it’s time consuming and takes a lot of administration but it does take account of shareholder membership.
What is the procedure for a show of hands vote?
1) business formally proposed and debated
2) chairman calls on those entitled to vote to indicate by raising a hand (or card) first for those in favour then votes against.
3) judge the sense of the meeting and count if not looking totally carried
4) declare the result of the vote - motion carried or lost - not obliged to report on the numbers - can take the vote again if challenged
5) include in the minutes - both of these are conclusive evidence without needing numbers voting each way
6) recommended that listed companies disclose level of proxies for against withheld so people know whether it’s worth asking for a poll
Unless specified by articles motions do not need to be seconded Horbury Bridge Coal 1879 “In my opinion if the chairman puts the question without it having been either proposed or seconded by anyone, that would be perfectly good.”
Courts can still intervene if they think fraud
What special provisions are made for voting (eg deceased members)?
A) PERSONAL REPRESENTATIVES of deceased member on production of official ‘grant of representation’ to the company can be made shareholders in their own right but until they do so articles usually disqualify from voting since they are not members
B) shares held in JOINT NAMES aRe normally represented by the name that appears first
C) MEMBER INCAPABLE by a court may take LEGAL representatives
D) MEMBER IR ARREARS OF SUMS DUE ON SHARES may not vote for those shares at general or class meetings
E) if any query arises CHAIRMAN DECISION IS FINAL. A vote admitted at the time of a meeting must remain valid
Outline the requirements relating to proxy cards for general meetings of public companies?
Proxy cards must be sent to all voting shareholders with the notice of the meeting. This is in case they can’t attend the meeting their vote can still be counted. A proxy still has the same rights so can demand a poll.
Companies listed on the stock exchange must provide a three way proxy card including Abstein. Many appoint the chairman.
Companies to fix a time to return the cards at a specified address not earlier than 48 hours before the meeting (ignoring non working day). If the poll is not take at the meeting can still submit proxy cards 24 hours before the poll.
This gives the company reasonable time to scrutinise to check correctly completed and count them. Usually submitted on the card provided or via website depending on the articles.
It is usual to draw up list a) number of members voting in this way b) the number of votes to be cast on a poll c) number of votes for against and withheld on each resolution
