Company Law: Meetings and Resolutions

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1 Annual General Meeting

• Public companies must hold an AGM

• within six months after its accounting reference date

• Private companies are generally not required to hold an AGM

• A company’s articles may impose additional meeting requirements

• Private-company members may require the directors to call a general meeting; it is not an AGM unless the constitution makes it one

• 21 days notice

• Ordinary business:-

  • Formal presentation of the financial statements

  • Reappointment of directors

  • Reappointment of auditors

  • Approval of dividend proposed by directors

2 Resolutions

• Ordinary

  • simple majority

  • ordinary business and (some) special business

  • 14 days notice

• Special

  • 75%

  • 14 days notice

• Written

  • private companies only

  • any resolution (ordinary or special)

  • …except for removal of auditor or director

  • Auditor approval of the wording is not required

  • A written resolution is circulated to eligible members, passes at the ordinary or special majority, and lapses after the statutory or specified period

3 Resolutions – Special Notice

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• Special notice applies only to some ordinary resolutions

• 28 days notice is given to the company

• The company gives members the applicable meeting notice and circulates the special-notice material

• Resolutions requiring special notice :-

  • to remove a director

  • to remove an auditor

  • to appoint a new auditor other than the retiring auditor

  • to fill a casual vacancy in the office of auditor

  • to confirm in appointment an auditor appointed by the directors in the mid-term to fill a casual vacancy

  • The obsolete over-age director rule is not a current special-notice ground

• Director / auditor may write written representations of reasonable length and not defamatory in nature

4 Resolutions

• Normally the directors will determine the agenda for a meeting

• Separate statutory powers govern requiring directors to call a general meeting, circulating a statement, and proposing a public-company AGM resolution

• To require directors to call a general meeting, members normally need at least 5% of voting rights

• For a public-company AGM resolution, the threshold is at least 5% of voting rights, or

• at least 100 qualifying members meeting the statutory paid-up capital test

• The request should be in hard copy form, or electronic form

• The request must be delivered not less than 6 weeks before the general meeting

• The requisitionists may request that a statement of reasonable length be circulated together with the notice of the meeting

• Reasonable length is, as usual, not more than 1,000 words

• The requisitionists will bear the incidental costs unless….

• ….the company resolves otherwise

5 Proxies

• A proxy is ‘a written statement authorising another person to vote on behalf of an absent shareholder’

• The person appointed need not be a member of the company – it can be anyone

• The word ‘proxy’ is used to describe both the form and the person appointed by the form

• Proxies may speak at the meeting

• They may vote on a poll and on a show of hands

• They may demand a poll

• Companies will provide ‘two-way’ proxy forms so that the absent member can indicate which way the proxy should vote – ‘for’ or ‘against’ each resolution

• Proxy forms should be delivered to the company not less than 48 hours before the meeting

• A corporate representative and a proxy are distinct statutory mechanisms

• A person may be appointed by more than one member as their proxy

6 Quorum

• A quorum is the minimum number of members who shall be present at a meeting before the meeting may validly pass resolutions

• The minimum number is normally contained within the constitution

• Typically, the minimum number is 2 members present, in person or by proxy

• But the word ‘meeting’ implies that there should be at least 2 persons

• So one member in person who also holds a proxy for another member cannot, normally, be a quorum

• It is, however, possible!

  • In the situation of a class meeting, where all the shares of that class are owned by a single person

  • If the company is a private company with only one member

  • If the court directs that a quorum shall be a single person

• If a meeting is inquorate at the scheduled start time it will normally be adjourned to ‘same time, same place, next week’

7 Voting

• Following discussion about a resolution, the chair will call for a vote

• Initially, this will be by ‘show of hands’

• Each member, no matter how many shares they hold, therefore has only one vote

• But members holding many shares may ask, following a show of hands, for a vote count – a poll

• Polls may be demanded by

  • Not less than 5 members

  • Members holding not less than 10% of the total voting rights

  • Members holding not less than 10% of paid-up capital

  • The chair

• Votes are counted, whether by show of hands or by poll

• Abstentions are not counted, neither ‘for’ nor ‘against’

• The chair’s decision about the result of the vote is final