P14 . Meetings of shareholders and members Flashcards
Which members resolutions cannot be passed by written resolution?
Removal of a director under s. 168
Removal of an auditor under s. 510
Process of members’ written resolution
Copies of proposed resolution sent to all eligible members
Members may signify agreement within 28 days with signature
WR is approved when requisite majority of members (in terms of voting rights) have signified agreement
Consent/signature after 28 days has no effect
Other than members, who else must copies of WR be sent to?
Auditor (if the company has one)
Threshold of % voting rights required to require a company to circulate a proposed resolution
5% (unless Articles stipulate a lower threshold)
How long does company have to comply with request to circulate MWR
21 days
If members request WR, who must meet the cost?
Those members, unless company has previously agreed to do so
On what grounds can a company apply to the court for an order not to comply with request to circulate MWR?
The rights conferred by CA2006 2. 292 are being abused
Three main types of members’ meetings
AGMs
GMs
Class meetings
Which type of private company is still required to hold an AGM?
Private companies which are traded companies, or that have it stipulated in their articles
In which period must a public co hold its AGM?
Within 6 months of the ARD
In which period must a traded private company hold an AGM?
Within 9 months of the ARD
Routine items of business for an AGM (6)
Receiving report and accounts
Declaration of final dividend
Election/re-election of directors
Reappointment and remuneration of auditors
Non-binding resolution for approval of directors remuneration report (quoted companies)
Resolution to approve adoption of new remuneration policy (quoted companies)
Non-standard items that may be brought to AGM (4)
Authorise issuing of additional shares
Waiving pre-emption rights
Authorise payment of political donations
Authorise purchasing of own shares
For which co’s may a member have the right to propose a resolution to appoint a person as a director
If there is a right contained in the Articles
When are class meetings held?
Whenever the rights of the holders of that class are to be varied
What is the quorum for class meetings convened for variation of class rights?
Two members, holding at least one-third of nominal value of the shares of that class
What must be on notice of AGM (6)
Statement that the meeting is an AGM
Date, time and location
Statement of entitlement to appoint proxies
Distinguish between ordinary and special res’
Comply with content requirements of circulars
Date and signature
How far in advance of meeting must notice and accompanying docs be sent?
21 clear days (not including date of notice or meeting
How far in advance of meeting should notice and accompanying docs be sent according to UK CG Code?
20 business days
Who should receive notice of AGM?
Eligible members, auditors, personal reps of deceased shareholders
How far in advance of AGM must notice of proposing to remove director or auditor be sent
28 days in advance
Which resolutions can be amended at an AGM?
Only ordinary resolutions
Process for amending resolutions at meetings
Amendment must be reasonably within scope of original
Must be approved by meeting before being voted on
What is the threshold for demanding a poll at an AGM
2 persons with the right to vote or 10% of voting rights
Other than members, who else can demand poll?
Chair of the meeting, or directors
What are the conditions which must be met for a traded company to hold a GM on 14 clear days notice (3)
Not an AGM
Electronic voting offered
Special resolution passed to reduce notice period to 14 days (at previous AGM, or GM since previous AGM)
What is the notice period for the general meeting of a traded company
21 clear days, unless conditions are met to reduce this to 14 clear days
When is the notice of a meeting deemed to have been served?
48 hours after posting, excluding NWD
In situations where it is not possible or desirable to give minimum notice, what is threshold required to have given valid consent to short notice of GM (public co)
Majority of members, between them holding 95% of share capital
In situations where it is not possible or desirable to give minimum notice, what is threshold required to have given valid consent to short notice of GM (private co)
Majority of members, between them holding 90% of share capital (may be increased by arts, up to 95%)
In situations where it is not possible or desirable to give minimum notice, what is threshold required to have given valid consent to short notice of AGM
All members
What is the quorum for members’ meetings?
2 (present or present by proxy), subject to any provisions in the articles, or 1 if there is a sole member
Majority to approve resolutions at meetings are determined by what?
Majority of those attending and voting on each resolution
3 examples of ordinary resolutions
Appointment or re-appointment of directors
Re-appointment of auditors
A capitalisation of profits
4 examples of special resolutions
Alteration of articles
Change of name
Disapplication of pre-emption rights
Reduction of capital
Role of chair at members’ meetings (7)
Authority to adjourn meeting
Rule on points of order
Decide upon validity of votes
Declare results of resolutions on show of hands
Eject members for unruly behaviour
Decide upon validity of amendments
Demand a poll
What is the aim of a procedural motion?
To prevent a section of members from causing a meeting to run out of time or stop an alternative view point being expressed by making lengthy speeches
What is a procedural motion?
A motion used (by the chair) to regulate the conduct of the business of a members meeting
In which instances can more than one proxy by appointed by a single member?
When a different proxy is appointed to exercise the rights attaching to different shares
Can members who appoint a proxy still attend and vote at meeting?
Yes, but this effectively revokes the proxy appointment
Why are proxy forms evaluated?
So as to keep a running total of votes for and against. For close votes or those looking like they may be rejected, the board might consider contacting larger shareholders to request that they vote
A provision in Arts is void if it excludes the right to demand a poll by:?
5 persons with the right to vote or 10% of voting rights
What info must quoted but not traded companies make available on a website following poll votes at meetings? (3)
Date
Text or description of subject matter of the resolution
Number of votes cast in favour and against
What info must traded companies make available on a website following poll votes at meetings? (6)
Date
Text or description of subject matter of the resolution
Number of votes cast in favour and against
Number of votes cast
Proportion of votes cast in favour and against
Number of abstentions (if counted)
What is the voting method at the majority of members’ meeting?
Show of hands
Which companies now typically do voting by poll in the first instance?
FTSE100 (almost all)
FTSE250 (most)
What provides validity for passing of resolution by show of hands
The declaration of the chair stating as much
Provision 4 of the Code requires directors to explain which actions are intended to be taken to consult with shareholders when announcing the results of a vote where what threshold of votes against is reached? ‘significant votes against’
20%
How does electronic voting work at members’ meetings?
Each member provided with voting handset which is registered to their shareholder account - their vote is instantly logged by the system - quicker counting and declaration of results
Is audio-visual conferencing of meetings permitted?
Yes, but it is far more likely to lead to adjournment or suspension in event of system failure for example
Who are often used to undertake mechanics of registering attendees and counting votes for members’ meetings?
Share registrars, under the oversight of the CoSec
Threshold for requiring independent proxy report on a poll
5% voting rights, or 100 members with shares which on average have been paid up to the sum of at least £100
Independent proxy reports - what must assessors report state? (5)
Whether procedures adopted were adequate
Whether votes case were fairly and accurately recorded and counted
Whether proxy appointments were properly assesses
Whether the notice complied with CA2006
Whether any company sponsored forms of proxy complied with CA2006
