Company Law Essay Help : Company Meetings
Cases referred to in this section
McConnell v E Prill & Co Ltd [1916] 2 Ch 57
Re Moorgate Mercantile Holdings Ltd [1980] 1 All ER 40, [1980] 1 WLR 227
Board meetings are held regularly to assist with the commercial continuance of the company. General meetings fulfil a more formal monitoring role and are concerned with the approval of certain statutory reports and accounts and with the exercise of certain powers, some formal and others relating to the protection of the company from inappropriate management.
There are two types of general meeting: the annual general meeting and the extraordinary meeting. The AGM must be held once a year with no more than 15 months between each, and must hold its first AGM within 18 months of incorporation (s.366). The extraordinary meeting is any general meeting other than an AGM, and is held as and when required by the company. Both types of meetings are convened by the board of directors but where they fail to call a meeting that is required, the Secretary of State may call one (s.367). An extraordinary meeting may be called by anyone holding at least one tenth of the paid up share capital. The articles of association of a company will always contain provisions as to the meetings of the company. The members, as a body, may act only through a general meeting unless all the shareholders assent.
Decisions reached at meetings are called resolutions, which may be of four kinds: ordinary resolutions; extraordinary resolutions; special resolutions; and elective resolutions. In addition, certain resolutions require special notice. Where a poll is held, the date of the resolution is that on which the result of the poll is announced.
Ordinary resolutions are passed when a bare majority of votes is sufficient. An ordinary resolution is sufficient to effect any transaction which is within the powers of the company and is not required to be effected in some other manner, either by the articles or by the Companies Act 1985.
An extraordinary resolution is one passed by a majority of not less than three-quarters of such members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as an extraordinary resolution has been duly given (Companies Act 1985 s 378(1); McConnell v E Prill & Co Ltd [1916] 2 Ch 57).
A special resolution is one that has been passed by such a majority as is required for the passing of an extraordinary resolution at a general meeting of which not less than 21 days' notice specifying the intention to propose the resolution as a special resolution has been duly given4.
If, however, it is agreed by a majority in number of the members having the right to attend and vote at any such meeting, being a majority together holding not less than 95 per cent in nominal value of the shares giving that right (excluding any shares in the company held as treasury shares), or, in the case of a company not having a share capital, together representing not less than 95 per cent of the total voting rights at that meeting of all the members, a resolution may be proposed and passed as a special resolution at a meeting of which less than 21 days' notice has been given.
A private company may elect by elective resolution that the above provisions shall have effect in relation to the company as if for the references to 95 per cent there were substituted references to such lesser percentage, but not less than 90 per cent, as may be specified in the resolution or subsequently determined by the company in general meeting.
To be valid, the resolution passed at the meeting must be the same as that specified in the notice convening it, both in form and in substance (Re Moorgate Mercantile Holdings Ltd [1980] 1 All ER 40, [1980] 1 WLR 227).
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