Company Law: Meetings and Resolutions

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1 Annual General Meeting

• a public company must hold an AGM within six months of its financial year end; a private company need not hold an AGM

• 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

  • resolution passed on the date required majority is reached

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 21 days notice to the members

• 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

• 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

• but sometimes members may require a resolution

• members with at least 5% of voting rights, or the statutory 100-member alternative, may require a resolution to be circulated or put to a meeting

• 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 proxy appointed by a member which is a company is called a ‘representative’

• 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