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Meetings

Members' meetings General

Can the members insist that a general meeting be held?

A member or members of a company with a share capital holding not less than 5 per cent of the paid up capital carrying voting rights may at any time lodge a requisition requiring the directors to convene a general meeting for the purposes stated in the requisition. If the company does not have a share capital, members holding not less than 5 per cent of the voting rights may do it. Anything in the articles that purports to make it more difficult or impossible is overruled by the Act. Articles can, however, make it easier for members to requisition a meeting.

Who has the right to attend a members' meeting?

Subject to the articles it is members attending in person, duly appointed proxies of members, duly appointed representatives of corporate members, the directors and the auditor. Other people, such as members' advisers, may attend with the consent of the meeting, but the consent may be withheld or withdrawn at any time for any reason. If this happens, the people affected must leave the meeting.

Is it possible to amend special resolutions or ordinary resolutions requiring special notice?

No it is not possible. This is because members must have notice of the precise wording. If an amendment is allowed, they do not have notice of the precise wording. However, it is possible to make amendments to correct minor clerical errors that do not affect the substance of the resolution.

Is it necessary to give notice of an adjourned meeting?

It depends on the articles. Table A says that notice of at least seven clear days must be given if the meeting is adjourned for fourteen days or more, and that the notice must give details of the time, place and general nature of the business. If the adjournment is for less than fourteen days, notice is not necessary. The position is similar under the new model articles.

What business can be conducted at an adjourned meeting?

Table A states that no business can be conducted at an adjourned meeting that could not have been conducted at the original meeting. This means that it must be within the terms of the notice that convened the original meeting. The position is similar under the new model articles.

What rights does a proxy have at a members' meeting?

The Companies Act 2006 extends the rights of proxies and they now apply in all companies, which was not previously the case. A proxy may be any person of the member's choosing and it is not possible (for example) to limit the choice to members of the company. A proxy can attend the meeting, count towards a quorum, speak, vote on a show of hands, join in a demand for a poll, vote on a poll and (if it is the wish of the members) act as chairman of the meeting. Articles may not limit these rights but they may give extra rights, though it is hard to think of any more.

My company has 100 shares registered in joint names and the joint shareholders disagree about how the votes should be cast. Does each shareholder cast 50 votes as they wish?

Not if Table A applies, though your articles might allow it. Table A allows the first named in the register of members to cast the votes on all 100 shares. This is also the position under the new model articles.

Quorum

What is the quorum for a members' meeting?

Section 318(3) defines a qualifying member as an individual who is a member of the company, a corporate representative or a person appointed as proxy in relation to the meeting. Section 318 provides that, unless the articles say differently, a quorum shall be two qualifying persons. However, in the case of a company only having one member, one qualifying person shall be a quorum, and this overrides anything to the contrary in the articles.

Articles usually do specify the number for a quorum and in the case of Table A it is two.

What happens if a quorum is not present or if a quorum ceases to be present?

It depends on the articles. Table A states:

'If such a quorum is not present within half an hour from the time appointed for the meeting, or if during a meeting such a quorum ceases to be present, the meeting shall stand adjourned to the same day in the next week at the same time and place or to such time and place as the directors may determine.'


What happens if it is not possible to obtain a quorum?

This can happen if the number for a quorum is set unrealistically high or if the number of members falls to or close to the number required for a quorum. It can also happen if one or more members stay away from meetings in a deliberate attempt to frustrate the business of the company, or to prevent a vote that they think would reach a decision contrary to their wishes.

If it is not possible to obtain a quorum, any director or any member entitled to vote can apply to the court for an order. The court can, if it sees fit, order that a meeting be held and it can stipulate such rules as it sees fit for the meeting. The court can, if it sees fit, order that the articles be overruled for this one meeting and that a single member shall constitute a quorum. The meeting can conduct necessary business and can, if the members so decide, pass a special resolution to change the articles so that for future meetings a lower number shall constitute a quorum. This has been done many times.

 
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