U3 + U4 Company Meetings and Resolutions

Question 1

How do Directors and Shareholders make decisions?

What is the name of the resolution, and what is the name of the meeting?

Answer 1

Directors make decisions via Board Resolutions after a Board Meeting

Shareholders make decisions via Ordinary Resolutions and Special Resolutions following a General Meeting

Question 2

What is the name of a directors meeting?

What resolutions can they make?

Answer 2

Directors make decisions via a board resolution, following a board meeting

Question 3

What is the name of shareholder meetings?

What resolutions can they make?

Answer 3

Share holders make ordinary resolutions or special resolutions following a general meeting

Question 4

What is a company members?

Answer 4

Shareholders or Gaurantoors depending on the company type

Question 5

Some decisions can be made by the directors alone, while some will require the members approval.

What is the procedure if a decision requires the shareholders approval?

Answer 5

1. The directors will call a board meeting, and pass a board resolution to call a general meeting of the members
2. The members will then reach a resolution in the general meeting
3. The directors will have another board meeting, and a board resolution will be passed to file and implement the decision and deal with any administrative matters.

Question 6

Where are directors powers derived from?

Answer 6

They come from the companies articles

Question 7

How do directors make decisions?

Answer 7

At a board meeting, a board resolution is reached by Majority Vote or Unanimous decision

Question 8

Can directors delegate their powers?

Answer 8

Under the Model Articles, they have the right to delegate any of their powers.

Question 9

Who and when can a Board Meeting be called?

Answer 9

All directors can call a board meeting at any time, or request the company secretary do so.

Question 10

What must be done if a board meeting is called?

Answer 10

Reasonable notice must be given to all directors.

The notice must include:

1. The date and time
2. The Place
3. The means of communication (can be telephone, video, text messages, instant messages)

Question 11

What happens if reasonable notice is not given to all directors of a board meeting and it goes ahead?

Answer 11

The directors can demand a new meeting

Question 12

What is Quorum?

Answer 12

Quaram is the minimum number of people required for the board meeting to be valid.

There must be at least 2 directors, or the meeting is not ‘QUORATE’ and the decision cannot be made

Question 13

How many directors must be present at a board meeting?

Answer 13

The quorum is 2.

If there is less than 2, the meeting is not quorate, and a decision cannot be made.

Question 14

What are the 2 rules relating to directors board meetings where there is a conflict of interest?

Answer 14

1. That director cannot vote, not count towards the Quorum
2. They Must declare the conflict of interest.

Question 15

What is the one exception to declaring a director’s conflict of interest?

Answer 15

A director does not have to declare their conflict of interest if the directors service (Employment) contract is being considered.

However, the will still be unable to vote or count towards the quorum

Question 16

Can directors still vote if there is a conflict of interest?

Answer 16

While they cannot vote, there are exceptions allowing a company to suspend this rule following a shareholder ordinary resolution.

The most important exception is where a director subscribes for a share in the company ( agrees to purchase new shares before they are issued)

Question 17

What is the effect of a director not declaring their conflict of interest at a board meeting?

Answer 17

It is a criminal offence

Question 18

How long do minutes of board meetings have to be kept?

Answer 18

Minuets of all Board meetings must be kept for atleast 10 years

Question 19

Must a board meeting always be held to reach decisions?

Answer 19

No.

If all directors are in agreement, the procedure for unanimous decision making may be used.

This allows directors to make a decision in writing or more informally instead of holding a Board meeting

Question 20

Where do Shareholders get their power from?

Answer 20

The companies act and the articles

Question 21

What are the 2 types of shareholders meeting?

Answer 21

AGM - Anual General Meeting
-All companies after Oct 1st 2006 must have AGM unless articles provide otherwise

EGM - General Meeting
Any other meeting other than the AGM

Question 22

What are the 2 types of Share Holder Resolutions, and what are there requirements?

Answer 22

1. Ordinary Resolution
   -Requires MORE THAN 50% of shareholders in attendance and voting
2. Special Resolution
   -Requires 75% or more of shareholders in attendance and voting

(NB OR requires MORE THAN 50% , so 50% wouldn’t pass, only 51% an up.

Special resolution requires 75% or more, so 75% would pass)

Question 23

How are General Meetings called?

Answer 23

Directors must call a General Meeting

However, shareholders have the power to requisition a general meeting, which requires the directors to call a general meeting

Question 24

How must notice of a shareholder general meeting be given and to whom?

How long is reasonable notice?

Answer 24

1. Written or electronic notice must be given to all shareholders and directors
2. 14 days clear notice must be given (however in effect it is 16 days as it does not include the date of service and the date of the meeting.)

If served by post, an additional 2 more clear days are required, so 16 clear days (18 in effect)

SHORT NOTICE CAN BE AGREED BY:

1. Agreed by a majority of number of members
   and
2. Together they hold more than 90% of the companies voting shares

Question 25

What must be included in notice of a general meeting? 4 things

Answer 25

1. Date and Time
2. Nature of Business
3. Full text of any Special Resolutions proposed or sufficient details of an Ordinary Resolutions proposed.
4. Reasonably Prominent Proxy Notice (Notice informing the shareholder of their right to end someone to attend and vote in their seat instead)

Question 26

What is the Quorum of shareholders required at a general meeting?

Answer 26

There must be atleast 2, unless it is a 1 person company

Question 27

How does the voting take place in a shareholder general meeting?

How many votes does each person get?

Answer 27

1. A show of hands (1 vote per person)
   or
2. a poll vote if demanded (1 vote per share)

Question 28

How can a poll vote be demanded in a shareholder general meetings?

Answer 28

1. The chair person
   
   2. At least 2 voting members
   3. Any members holding at least 10% of the voting shares

In a poll vote, there is one vote per share.

Question 29

How is voting done in a directors board meeting?

Answer 29

Show of hands or oral assent

Question 30

When must directors call a general meeting after a requisition?

Answer 30

A member holding atleast 5% of the companies paid up share capital with voting rights may requisition the directors to call a general meeting.

The directors must call a general meeting within 21 days from the date of requisition, and that meeting must be held within 28 days of it being called.

If the directors fail to do so, the shareholders can call the meeting themselves and recover costs from the company.

Question 31

What type of company can pass a resolution in writing rather than holding a general meeting?

How many votes does each shareholder get?

Answer 31

1. A private company
2. One vote per share

Question 32

How long must general meeting minuets be kept for?

Answer 32

Minuets must be kept of all GM for atleast 10 years

Question 33

What must be submitted to companies house after a special resolution?

Answer 33

After all Special Resolutions, a signed copy must be filed at companies house

Question 34

Must all ordinary resolutions be filed at companies house?

Answer 34

No, only some OR must be signed and filed at companies house - not all.

An example is where the OR issues shares

Question 35

If a general meeting resolution alters the companies articles, what must be filed at companies house?

Answer 35

1. A SIGNED COPY OF THE RESOLUTION
2. A COPY OF THE AMENDED ARTICLES DOCUMENT

Question 36

Which resolutions must be filed at companies house?

Answer 36

1 - Board resolutions never need to be filed

2 - Ordinary Resolutions only filed if issuing shares

3 - Special Resolutions always filed

Question 37

What are the 2 accoutning requirments of companies?

When must they be filed?

Answer 37

1. Directors must file accounts at the end of each financial year (non-compliance is a criminal offence)
2. Directors must also prepare a financial report for each financial year

For private companies, this must be filed within 9 months from the end of the accounting reference period.

SMALL COMPANIES ARE EXEMPT

Question 38

What is a small company?

Answer 38

They must meet atleast 2 of the following:

1. Turnover no more than £10.2m
2. Balance sheet no more than £5.1m
3. No more than 50 employees

Question 39

What is a confirmation statement?

When is it due?

What is the effect of non-compliance?

Answer 39

1. A confirmation statement (CS01 Form) confirms that all required information to be filed with companies house has been, and provides details of any changes.
2. It must be filed each year within 14 days of the anniversary of the companies incoporation.
3. Failure to do so is a criminal offence