Convening a company meeting - Chapter 2 Flashcards
Explain in detail who is entitled to receive notices of a PLC
The act requires that notice of a meeting is sent to every member unless the articles say otherwise. For example non voting shareholders or preference shareholders may not be entitled to attend.
There is a statutory right to receive the accounts so often companies include the notice in the accounts with a disclaimer to say that it
a) does not confer a right to attend
b) is for information only to those not entitled to receive it.
Crest shares is normally that members of those shares to be included not more than 2 days prior to the notice being sent. Some articles say the notice is classed as sent even if sent to a previous owner of the shares.
Also the Company’s AUDITORS have a statutory right.
PERSONAL representatives of deceased members ie executors or administrators. Depending on articles
Who may call the AGM of a company?
a) The board of Directors must call the AGM.
The Co Sec would then send out the notice. If there is no quorum to call an AGM the board can coopt directors who would then be reelected at the AGM.
b) The court can order an AGM be held.
What procedure should be adopted if it is decided to postpone the business for which a meeting is already called?
If the notice has not yet been sent out the directors can recind their decision to call the meeting.
If the notice has been issued the meeting cannot be cancelled. You can send an informal notice to those due to attending stating these intentions but the meeting must go ahead. You can then make the first special resolution a resolution to cancel the meeting.
CASE Smith vs Paringina mines - The company cancelled the meeting and an aggrieved director advertised in the press and the meeting went ahead. The court decided the meeting was valid as it should never have been cancelled.
Explain what happened in the Smith vs Paringina mines case?
The company cancelled the meeting and an aggrieved director advertised in the press and the meeting went ahead. The court decided the meeting was valid as it should never have been cancelled.
Explain Hogg vs Cramphorn
This case is where they issued shares to try to stop a takeover and the court ordered that a GM should be called.
What is the effect of failure to send notice of a meeting to a person entitled to receive it?
The meeting would be declared as invalid. This happened with Younf vs Imperial ladies club 1920 where the Dutchess of Abercorn informed the chairman that she would no longer attend meetings. Mrs Young was expelled from a meeting. The expulsion was declared as invalid as the Dutchess had not received notice of the meeting. The two accept ions from the court for not sending notice were
A) member beyond summoning distance
B) member too ill but both of these too unreliable so best to just send notice
Accidental failure is disregarded. Only uk addresses covered so if member a road must supply uk address. If you send two returned undelivered over a period of at least 12 months stop sending it.
What are the standard methods provided by the Act for serving notice of meetings?
Notices are by law allowed to be hard copy or electronic to those agreeing to receive it that way and to an email address they specify for this use. Doesn’t matter if not received matters it was sent, correctly addressed and posted.
You can also post it on a website with a circular specifying the exact place it has been posted.
Fax is also fine and treated as electronic
It can also be put on a CD rom and sent or handed to someone. In writing in the 2006 act means hard copy or electronic. Does not allow oral. Members can agree to short notice but not no notice. For some shares where you don’t have addresses it is far from clear if a newspaper advertisement would cover it.
What are the required periods of notice for general meetings?
For a PLC or a trade company it is 21 days unless members have passed a resolution saying 14 days which they normally do. AGMs are 21 days.
For other companies 14 days. The articles can state longer notice.
Explain and illustrate what is meant by clear days notice?
Clear days does not include the date the notice is received or the date of the meeting. So for example you must allow 48 hours after a notice is sent for it to be classed as received (excluding non working days except in older articles). So if it was sent on 1 March it is classed as received on 3 march you start counting from 4 March and day 21 would be 24 March, with the meeting on 25 march.
How may the prescribed period of notice be waived?
You can include a waiver notice resolution to be agreed by the board of directors if for example the directors were also the shareholders. You can table the resolution at the start of the meeting. It can be oral but best to get it signed in writing.
Mention two points of what would be found in an AGM notice?
1) Title (AGM) date, time, place
2) Skeleton Agenda, listing ordinary business and the text of any special resolutions
3) should avoid trickiness - Kaye vs Croydon tramways 1898 - noticed was to mislead
4) must include registered address, perhaps proposed dividend and names of those to be reelected.
Explain the distinction between ordinary and special business of a company general meeting, which is found in some articles?
Ordinary business would include consideration of the accounts, reappointing directors, appointment of the auditors. Special business would include a company from an auditor on his resignation.
In what circumstances would the full text of a resolution be included?
a) all special business must include the full text
b) if it is an ordinary resolution but not of a routine nature
When may an additional circular be issued with the notice?
a) if a prescribed minimum fraction of the membership request it (no more than 1000 words)
b) an aggrieved director or Auditor threatened with removal from office they may request that the company sets out its representations as long as it is of reasonable length and not defamatory in character.
C) scheme of arrangement
D) issue of equities for cash (special resolution)
E) if listed on the stock exchange must issue circular detailing any non routine business
Note practical differences big and small companies, big need to keep up more communication.
