Week 9 - Shareholders Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

what rights are generally attached to shares?

A
  • vote
  • information
  • sharing in company profits (dividends)
  • sharing in surplus capital after winding up
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is the definition of a share?

A

units into which proprietary interest in a profit company are divided

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what can the MOI say about shares?

A
  • terms for voting rights
  • entitle SH to distributions
  • divide shares into classes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what are the duties which attach to shares?

A
  • pay for shares
  • participate in meetings and vote
  • comply with MOI, rules, SH agreements
  • notify company of any changes needing to be made to the SH register
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what is the purpose of a SH meeting?

A

to vote and debate on a decision to be made

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

who attends a SH meeting?

A

the SH who have the rights to vote

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what powers do the SH with voting rights have?

A
  • amend the MOI
  • approve board rules
  • appoint/remove directors
  • approve SH remuneration
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

who may call SH meetings?

A
  • board or anyone specified by MOI

- SH, individually or collectively, that hold at least 10% voting rights (MOI can require less)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what is the record date?

A

the date before which SH must be registered before they may vote or receive dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what are some rules regarding the record date?

A

may not be less than 10 business days before meeting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

what are the rules regarding timing of notice of SH meetings?

A

given 15 (pub) / 10 (priv) days prior to meeting (MOI can change this)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what must be included in notice of SH meetings?

A
  • date, time, place
  • purpose of meeting
  • copy of proposed resolutions to be tabled
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

when may the SH meeting still be held despite non-compliance?

A
  • unanimous assent at common law
  • companies with 1 SH
  • every SH is also a director
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what is a proxy?

A

if a SH cannot attend a meeting, they can send a proxy who will attend/vote/speak on behalf of the SH

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

rules for a proxy?

A
  • does not have to be a SH
  • multiple may be appointed
  • must be appointed in writing and must be presented to company before the meeting
  • you can tell them how to vote or they can use their discretion when representing you
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

how long is a proxy valid for?

A

a year, unless expressly state otherwise in the proxy document

17
Q

what is a quorum?

A

the minimum number of qualified persons whose presence at a meeting is necessary before business can be validly transacted

18
Q

what are the quorum requirements for a valid meeting?

A

at least 25% of SH entitled to vote on any particular matter must be present

19
Q

what are the quorum requirements for a matter to be considered?

A

at least 25% of SH entitled to vote on that particular matter must be present

20
Q

what are the resolution percentages?

A

(of those present at the meeting)

  • 50%+1 = ordinary
  • 75% = special
21
Q

what is the Annual General Meeting?

A

a meeting held once a year where particular business is required to be conducted

22
Q

which company is required to hold an AGM?

A

public companies

23
Q

what is the minimum business to be conducted at the AGM?

A
  • presentation of directors report, AFS, audit comm report
  • election of directors
  • appointment of auditor and audit comm
  • any matters raised by SH
24
Q

what is the majority rule?

A

when a person becomes SH, they agree to be bound by the decisions of the majority, unless decisions not made lawfully

25
Q

what does special resolution do for the minority?

A

protects the minority

26
Q

what are the Act’s remedies for protecting minority SH?

A
  • declaration of rights
  • relief from oppressive, prejudicial conduct
  • appraisal remedy
  • derivative action
27
Q

what is a declaration of rights?

A

a SH may apply to court for a declaratory order regarding their rights ito:

  • the Act
  • MOI
  • company rules
28
Q

what can appraisal remedy be used for?

A
  • resolutions to amend the MOI in a way that alters the rights/terms attached to shares that is materially adverse to their rights/interests
  • if a company is undertaking a fundamental transaction
29
Q

what are the procedural requirements of the appraisal remedy?

A
  • they are entitled to the value of their shares immediately before the resolution is adopted
  • must give written notice of objection before resolution is put to vote
  • attend meeting and vote against resolution
  • notify company that they will rely on appraisal rights after meeting
30
Q

what does derivative action allow for?

A

allows the SH to litigate on the company’s behalf to enforce their SH rights

31
Q

what are the steps for statutory derivative action?

A
  • serve a demand on the company
  • an independent person must be appointed by company to investigate if their are grounds to proceed
  • company may either initiate proceedings or refuse to comply
32
Q

what if the company refuses derivative action?

A
  • the SH may then approach the court to say they want to litigate on behalf of the company and will have to satisfy the court that we are acting in good faith