Lecture 14 - Company meetings and resolutions

Question 1

Two categories of company meetings

Answer 1

• Board meetings (directors)

- General meetings (members)

Question 2

Evidence a decision is valid even if no actual meeting has taken place

Answer 2

Articles normally provide that a document signed by all directors is equally valid. Telephone meetings, emails and virtual meetings can also be used.

Question 3

Meetings notice

Answer 3

Directors are entitled to reasonable notice, differs depending on situation.

Question 4

Does business to be conducted in meeting need to be specified beforehand?

Answer 4

No

Question 5

If no notice given

Answer 5

Resolution passed could be invalid. Accidental omission = not invalidate. Deliberation omission > invalidate

Question 6

Case for notice of board meeting

Answer 6

Homer District Consolidated Gold Mines 1888 > notice given deemed insufficient

Question 7

Quorum if personal interest

Answer 7

Can attend and discuss, but cannot vote or count towards quorum

Question 8

Quorum if personal interest case

Answer 8

Greymouth Point Elizabeth Railway and Coal Co 1904 > 2 of 3 directors had personal interest, only 1 director able to vote - court determined meeting was inquorate

Question 9

Voting board meeting (3)

Answer 9

• One director = one vote
• Simple majority on show of hands
• Chairman usually has casting vote in event of deadlock

Question 10

Board meeting minutes

Answer 10

Must be taken and kept in Minute book.

Question 11

Do members have legal right to inspect Minute book? (Case)

Answer 11

No, R v Merchant Tailors Co 1831

Question 12

Three types of meetings for members (4 before CA 2006)

Answer 12

• Annual General Meetings
• General Meetings
• Class Meetings
• Extraordinary General Meeting (anything with shareholders not AGM)

Question 13

AGM

Answer 13

• Private companies no longer required to have under CA 2006

- Public companies must have one each calendar year

Question 14

General (company) meetings (3)

Answer 14

• Any other meeting of members not AGM.
• Directors can call as they see fit
• Must call GM if % shareholders require them to

Question 15

GM requisitioned by members

Answer 15

In Articles - min = 5%, usually 10%. If directors don’t comply within 21 days, members can convene meeting themselves

Question 16

Class Meetings

Answer 16

Meetings of holders of particular class of shares. Only class members entitled to attend

Question 17

General meetings > venue and time (case)

Answer 17

Reasonable time and place. Cannon v Trask 1875 > fixed GM to time when hostile shareholders known be unable to attend

Question 18

General meetings > notice (5)

Answer 18

• Governed by Articles
• Min 14 clear days notice of any meeting members that Articles cannot override
• Majority in number of members holding 90% shares can agree to any shorter period of notice they wish
• All members and directors entitled to notice even if known they cannot attend (Young v Ladies Imperial Club 1920 - boat to Australia)
• Notice must say if any special resolutions are to be proposed, and must be set out in full

Question 19

Unless properly convened…

Answer 19

Meeting is irregular, and resolutions passed are invalid

Question 20

General meetings > proxies

Answer 20

Members can appoint proxy attend and vote on their behalf. Can vote as member wishes, or at own discretion (two-way proxy)

Question 21

Proxy paper

Answer 21

Physical piece of paper authorising person to act on member’s behalf

Question 22

Quorum only necessary… (case)

Answer 22

At start of meeting. Hartley Baird Ltd 1955 > director walked out of meeting in protest, quorum still in force and decision made.

Question 23

General meetings > can only proceed to business and be valid if: (6)

Answer 23

• Properly convened
• Proper notice given
• Quorate
• There is a chairman
• Business properly conducted
• Minutes taken

Question 24

General meetings > voting =

Answer 24

Right not a duty, member can abstain. Voting usually done by show of hands, one person = one vote.

Question 25

General meetings > poll

Answer 25

Can be demanded before or after show of hands. One share = one vote

Question 26

Who can demand poll?

Answer 26

Chairman or governed by Articles. Usually 5 members, or 1 or more members holding 10% voting rights.

Question 27

General meetings > adjournment

Answer 27

If inquorate/ chaotic. Members can vote as to whether needed

Question 28

General meetings > Minutes (4)

Answer 28

• Must be taken
• Arranged by company secretary
• Signed by chairman
• Open to inspection by members without charge

Question 29

Company resolution

Answer 29

Decision the shareholders want to make/ needs approval in general meeting. Way of obtaining approval/ consent

Question 30

Two types of company resolution

Answer 30

• Ordinary

- Special

Question 31

Resolution for board meetings =

Answer 31

Board resolution

Question 32

Ordinary resolution (3)

Answer 32

• Anything not special resolution
• Passed by simple majority >50% of members attending AND voting
• One vote = one share

Question 33

Special resolution (2)

Answer 33

• Companies Act will specify if necessary

- Passed by NOT LESS 75% members

Question 34

Special resolution examples

Answer 34

• Alteration Articles of Memorandum
• Change company name
• Members’ compulsory/ voluntary winding up

Question 35

Written resolutions (6)

Answer 35

• Can only be used by private companies (not public)
• Members sign resolution as evidence of consent
• Must sign and return within 28 days
• Same majorities as normal
• If > 28 days, automatically lapses and will have to be repeated
• Resolution passed as soon as appropriate majority achieved

Question 36

Amendment of resolutions only applies to…

Answer 36

Special resolutions, the only resolution where the company has to set out the content of resolution

Question 37

Amendment of resolutions (+ case)

Answer 37

Any amendment to substance resolution negates notice given, makes invalid. Would amendment make member reconsider decision to attend?

Question 38

Cases of amendment of resolutions (2)

Answer 38

• Moorgate Mercantile holdings Ltd 1980
• Teede and Bishop Ltd 1901 > original resolution to sell assets then wind up company, amendment to wind up company without sale, far too different.

Question 39

Registration filing of resolutions

Answer 39

• Special resolutions must be filed with Registrar at Companies House within 15 days
• Ordinary (apart from some exceptions) don’t need to be filed

Question 40

Notice of all general meetings must be sent to… (3)

Answer 40

Directors, shareholders and auditors

Question 41

Electronic communication with shareholders

Answer 41

Shareholder must positively consent to communications by electronic means, and must be in articles