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Company Compliance and Administration > Shareholder Meetings > Flashcards

Shareholder Meetings Flashcards

1
Q

When can a written resolution NOT be used (Exceptions)

A

Removal of auditor

Removal of a director

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2
Q

Who can propose a written resolution at any time

A

Per S.291, directors can propose a written resolution at any time

s.292-295
Members can propose a WR by:
Not less 5% of total voting rights
The company will then circulate the wording of the resolution, and can also include a 1000 word supporting statement

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3
Q

Who should a written resolution be sent to and how?

A

All eligible members at the same time.

By hard copy, electronic means or on the website

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4
Q

Who can propose a written resolution?

A

s.292-295
Members can propose a WR by:
Not less 5% of total voting rights
The company will then circulate the wording of the resolution, and can also include a 1000 word supporting statement

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5
Q

How is a written resolution approved?

A

Signify agreement: by returning a document to the company (hard or electronic) signifying their consent

Approved when: the requisite majority have signified their agreement

Lapses: 28 days (CA2006 s.297)

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6
Q

What is the Duomatic principle?

A

If 100% of the shareholders come together to approve something unanimously, then it becomes binding and passes like it was agreed at a shareholder meeting. This is how public companies can pass a written resolution.

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7
Q

What is the difference between an AGM and a GM?

A

AGMs have to happen annually, however GMs are as and when required. There is generally no difference in business of the meeting.

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8
Q

What is the requirement to hold an AGM?

A

AGMs have to be held by public companies and traded companies.
There is no statutory requirement for a private company to hold an AGM, except if they are traded (s.336).

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9
Q

What is the business of a general meeting/AGM?

A
  • Receiving annual report/accountd (CA2006)
  • Declare dividend
  • Elect directors
  • Appoint auditors/Remuneration of auditors
  • Quoted companies: resolve to approve director remuneration report (non-binding) and directors remuneration policy (binding, every 3 years)
  • Change articles
  • Issue more shares
  • Disapply pre-emption rights
  • issue shares instead of cash dividends
  • Political donations
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10
Q

Who has authority to convene a General Meeting?

A

Members with 5% of the voting rights can convene a meeting

Directors

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11
Q

What is a class meeting?

A

Meeting of those holding a certain class of shares

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12
Q

When is a class meeting required?

A

When rights affecting that class are being changed

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13
Q

If a class has no rights to vote, can they still vote at a class meeting?

A

They can vote at a class meeting, but CANNOT vote at a general meeting/AGM

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14
Q

Who has authority to convene a class meeting?

A
  • Members with 5% of the voting rights can convene a meeting
  • Directors
  • Exception: Members of a class cannot come together to demand a class meeting
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15
Q

What are the notice periods for meetings for the following companies?

  • Private companies
  • Public companies
  • Listed Companies
  • Traded companies
  • Special notice for ordinary resolutions
A
  • Private companies - 14 days (GM)
  • Public companies - 14 days (GM) and 21 days (AGM)
  • Listed Companies - 20 days (FRC Guidance on Board Effectiveness (BEG))
  • Traded companies-21 days (but can be reduced to 14 days by SR)
  • Special notice for ordinary resolutions - 28 days (but can be reduced to 14 days by Articles)
    Required for removing auditor/director
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16
Q

Can notice periods be altered? How?

A

By agreement to short notice

You cannot shorten notice periods, only extend them by amendment to the Articles by special resolution.

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17
Q

What is a clear day?

A

Doesn’t include day notice is sent or date of the meeting

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18
Q

When does the notice period begin?

A

A notice period begins once notice is served/received, which is 48hrs after posting/sending (s. 360). Unless it was posted on a website, then it is immediate (s. 1147).
48hrs + clear day + 14 days + clear day

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19
Q

How can a company agree to hold a general meeting or AGM at short notice?

A

Private company: 90% share capital (can be increased in Articles only to 95%)
Public company: 95% share capital
Protects the minority shareholders from quick decisions from majority shareholders.

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20
Q

What should be included in the notice?

A
  • Time, place, date of meeting
  • General nature of business
  • Details of resolutions
  • Special/ordinary
  • Signature of CoSec on behalf of the board / or from Director
  • Details of how to appoint a proxy (Listed companies have to issue a form, the others just info on how to appoint)
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21
Q

Where is quorum found for members meetings, and what is the quorum stated here?

A

CA2006 s. 318
Sole member = 1
All other companies = 2 present in person or by proxy (unless Articles state otherwise – model articles are silent on quorum)

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22
Q

What are the provisions for where there is a lack of quorum?

A

Model Articles = quorum not present within 30mins, chair must adjourn meeting
CA2006 = if one member appoints 2 proxies, this does not constitute a quorum as it only represents one member.

23
Q

If one of two members refuses to attend general meetings, can a meeting be held?

A

No – under the model articles, no, but if the companies articles state so, then yes.

24
Q

What are the main responsibilities of the Chair in regards to conduct at a shareholder meeting and where is this authority found?

A 
Authority is found in the Articles
Responsibilities:
•	Ensure meeting is properly and fairly conducted allowing opinions to be expressed
•	Minutes reflect the meeting
•	Adjourn meeting (if disorderly)
•	Points of order
•	Decide validity of votes
•	Declare results of show of hands
•	Eject members
•	Decide validity of amendments to resolutions
•	Demand a poll
25
Q

When can a chair close a meeting?

A

When all matters on the notice have been concluded.

26
Q

When can a chair adjourn a meeting?

A

Chair can adjourn only if there is disorder. Members must consent to any adjournment otherwise.

27
Q

What are the 6 main procedural motions?

A
  1. The closure
  2. Next business
  3. Previous question
  4. Postponement (v1)
  5. Postponement (v2)
  6. Adjournment
28
Q

What do traded companies have to do differently in regards to the answering of questions at a general meeting?

A

Ensure all questions put by members attending the meeting and relating to the business of the meeting are answered.

29
Q

What are the rules in regards to the adjournment of a shareholder meeting?

A

As per the model articles:
• Adjourn after 30mins if no quorum
• Adjourn if meeting consents, for safety and orderly meeting
• Chair must give alternative time/place
• After 14 days, then 7 clear days notice
• No extra items should be added to an adjourned meeting

30
Q

What powers do proxies have under s.324?

A

Attend, speak and vote on behalf of the member

31
Q

Can a shareholder appoint more than one proxy?

A

If someone has more than one share with varying rights, then more than one proxy can be appointed to exercise the rights attached to each share.

32
Q

What should the notice of a meeting contain in regards to proxys?

A

Information on how to appoint a proxy

Listed: include the 3 way proxy form

33
Q

What is the maximum cut off point for a company to receive a proxy instruction form under s. 327?

A

48 hours is the maximum amount of time a company can specify for the forms to be lodged – any further away from the meeting then that is unlawful.
Directors can only shorten this cut off point (i.e 24hrs) but cannot extend it (i.e. forms to be lodged 1 week before the meeting).

34
Q

How are proxy instruction forms submitted electronically? What is the difference for a traded company?

A

The company should specify a particular email address (i.e. agmproxies@arup.com).
Traded companies – it is a requirement to provide a special email address.

35
Q

Can someone vote in person once they have appointed a proxy?

A

Yes – if they attend in person, this revokes the proxy.

36
Q

What is a three-way proxy and what type of company should issue them?

A

Listed companies must provide a three-way proxy form.
Normal proxy form: Member also appoints the proxy to speak on their behalf, and use their discretion if no instructions have been noted.
Three way: Member adds to the form instructions on how to vote

37
Q

Where must proxies be returned to?

A

Registered office, or any other place specified.

38
Q

How is appointing a proxy different for listed companies?

A

The proxy form must be in writing (paper or electronic)

39
Q

Can the chair be appointed as a proxy on behalf of a member?

A

Yes – it is common practice for members to appoint the Chair as their proxy

40
Q

In what two ways can a corporate member appoint someone to attend, speak and vote a general meeting on its behalf?

A
  1. Appoint a proxy

2. Appointing a corporate representative

41
Q

What happens if a member holding 1 share appoints a proxy, but then a few weeks later appoints another proxy?

A

The latest received proxy is the official proxy.

42
Q

Why do pooled nominee accounts pose issues in regards to proxies?

A

Pooled Nominee Account: Most brokers lob everyone’s securities into one pot – known as a pooled nominee account or an omnibus account. The broker lumps the shares of a number of clients into a single client account.
There isn’t one person entitled to that share – it will depend on who is signed up to that broker.

For traded shares:
The share registrar would need to contact the person to be able to confirm what the shareholding is on the day of the AGM, compared to the date of the proxy form submitted.
The member appointing a proxy could also have sold the shares when it comes to the day of the AGM.

43
Q

What is the purpose of abstaining from voting? What legal effect does this have?

A

Abstentions aren’t a legal vote but are noted in the minutes.
The purpose is to note discontent and dissatisfied with the options.
In a poll of a traded company, abstentions are published.

44
Q

Can a proxy demand a poll (s.329)?

A

Yes – proxies have the right to attend, speak and vote on behalf of the member.

45
Q

What does s.321 provide in terms of voiding provisions in articles in relation to polls?

A

Article provisions are void unless it is to appoint a chair and adjourn the meeting (s.321(1)), and where the provisions exclude the right of minority shareholdings to call a poll (s.321(2)).

46
Q

What is the process for demanding a poll?

A
  1. Verify – the legality of holding the poll
    2- Confirm – when the poll will take place (after meeting or a later date)
    3- Inform – the meeting of the procedure to vote
    4- Collect/Count – scrutineers collect and count
    5- Publish – the result:
    - Quoted: Date, resolution, votes for/against
    - Traded: In addition, % capital, abstentions
47
Q

What is an independent poll report?

A

A member can request a report if they think a poll was conducted unfairly. The report will include:

  • If procedures were adequate
  • How votes were cast
  • Notices complied with
48
Q

Who can request an independent poll report?

A

Members (to be valid, the members must constitute 5%+ of voting rights or 100+ members with £100 joint capital)

49
Q

What is the process to appoint an independent poll assessor?

A

The members require the directors to appoint an assessor.

The assessor has to be independent (i.e not an officer/employee of the company)

50
Q

Show of hands

A

The advantage of a “show of hands” vote is that it shows the mood of the meeting, after questions have been taken and speeches made.

The articles can remove the right to vote by show of hands

51
Q

How does a show of hands work where shareholders have differing numbers of shares?

A

Each person in attendance has one vote

52
Q

How is a show of hands declared for ordinary resolutions and special resolutions?

A

Declared by the chair. It is at the Chairs discretion as to whether a show of hands has reached the requisite majority to pass a special or ordinary resolution. Shareholders can demand a poll if the vote is close.

53
Q

What is the ‘casting vote’?

A

The Chair or other Director chairing the meeting usually has the casting vote. The chair will then have the deciding vote in the case of any deadlock (i.e. 5 votes for, 5 against)

Company Compliance and Administration (5 decks)

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