Shareholders' Rights

Question 1

Notice period for AGMs

Answer 1

• AGMs: The notice period for an annual general meeting of a traded company is at least 21 clear days: s.307A(1)(b) and s.360(2) CA 2006.

Question 2

Notice period for GMs other than AGMs

Answer 2

• : notice period for a general meeting of a traded company is at least 21 clear days but may be reduced to 14 clear days: s.307A(1)(a) and s.360(2) CA 2006) provided the following conditions are met:
  i) GM is not AGM
  ii) company provides a facility enabling all shareholders to vote electronically at any meeting held on such reduced notice
  iii) shareholders have passed a special resolution at or since the most recent AGM approving the shorter notice period.
  Consequently, many companies include a resolution at each AGM enabling them to call a general meeting on as little as 14 clear days’ notice.

Question 3

Basic information to be included in the notice for AGM

Answer 3

S.311(1) CA: must state the date, time and place of the meeting.
S.311(2): must state the general nature of the business to be dealt with at the meeting.
S.337(1): must state that the meeting is an annual general meeting.
S.325: must contain a statement of rights

Question 4

Additional info to be included in the notice for AGM

Answer 4

S.311(3) CA 2006 provides a list of additional information that traded companies must include e.g. address of website providing information required by virtue of s.311A

Question 5

Explanatory Circular

Answer 5

• If considering special business at AGM, co must publish explanatory circular to explain to SH the effects of proposed AGM resolution
• Contents of explanatory circular:
  • LR 13.8.9G: circulars where special business is proposed need to comply with LR 13.3.1R
  • LR 13.3: content requirement for circular
  • LR 13.7.1r: buyback notice content
  • LR 1.3.1R: info can be incorporated by reference to info contained in prospectus or other docs filed with FCA
  • LR 13.8.1R: allotting shares notice content
  • LR 13.8.2R: pre-emption rights notice content

Question 6

Shareholder Requisition Rights - To call GM

Answer 6

• s.303 CA 2006: Shareholders of all companies in all circumstances holding at least 5% of voting rights can require the board to call a GM
• Shareholders can require resolutions to be put before a general meeting they have convened under s.303(4)-(5) CA 2006

Question 7

Shareholder Requisition Rights - To require resolutions

Answer 7

• In addition, ss.338-340 CA 2006 gives shareholders of public companies the power to require resolutions to be put before an AGM.
• Under s.338(3), to qualify for the right to request a resolution to be put before an AGM, the request must be made by either:
  a) a shareholder or shareholders holding at least 5% of the total voting rights; OR
  b) at least 100 shareholders with the right to vote on the resolution at the AGM and holding, on average, per shareholder, at least £100 of paid-up share capital.
  N.B. note that very few actually pass, but they help bring issues to light e.g. with your BP example, to bring discussion on emissions. Sports Direct had one about way staff were treated, wasn’t successful but enabled discussion

Question 8

Resolutions to be sent to RIS

Answer 8

• LR 9.6.2R: forward FCA two copies of all resolutions other than resolutions concerning ordinary business at AGM, asap after GM. All docs to go to NSM
• LR 9.6.18R: must notify RIS ASAP after GM of all resolutions passed other than resolutions concerning ordinary business assessed at AGM