Company Law Solutions provides an expert service for your company law requirements, including such as the calling and the conduct of company meetings.
There are two types of general meetings: Annual General Meetings and Extraordinary General Meetings. The directors of the company should determine the date of the AGM (if they wish to hold one) and may call an EGM whenever they think fit. There are also provisions for members to request a general meeting to be held and to call one themselves if their request is not complied with. The main statutory provisions are:
Directors' power to call general meetings (sec302)
This simply says the directors of a company may call a general meeting. Strangely, this was not a provision of the old Act, but has been in standard articles since 1856 (Art. 25, Table B, Joint Stock Companies Act 1856).
Members' power to require directors to call general meetings (sec303 - sec304)
The directors must call a general meeting if so requested by the holders of 5% of the voting shares (or 5% of the voting rights if there are no shares). (The figure was reduced from 10% to 5% by the Companies (Shareholders' Rights) Regulations 2009 (S.I. 2009/1632), reg. 4(2).
The request for the meeting must state the general nature of the business to be dealt with and may include the text of a resolution to be moved at the meeting (provided the resolution would not be ineffective (e.g. under the Act or because contrary to the company's articles, etc., and provided it is not defamatory, frivolous or vexatious).
If the request is properly made, the directors must within 21 days call the meeting for a date not more than 28 days after the date of the notice calling the meeting. If the request included a proposed resolution, that must be included in the notice, which will then be part of the business that can be conducted at the meeting. (If it is a special resolution, the notice of the meeting must say so, in accordance with sec283, above.)
Members may call meeting at company's expense (sec305)
If the directors do not call a meeting as properly requested under the above sections, the members who requested it (or half of them, by voting rights) may call the meeting themselves, for a date not more than three months after the date when the directors were required to call it (i.e. 21 days after the request was made - see above).
The meeting must be called in the same manner, as nearly as possible, as meetings called by the directors.
The members calling the meeting can claim any reasonable expenses they have incurred, which the company must deduct from any remuneration that would have been paid to the directors. (Under the old law, the company had a power to do this, but was not required to do so.)
The court may order meeting (sec306)
If for any reason it is impracticable to call a meeting or to conduct it as prescribed by the articles or the Act, then the court may call one, to called, held and conducted in any manner the court thinks fit.. When doing so, the court may give such ancillary or consequential directions as it thinks expedient, including that one member may constitute a quorum.
Notice of general meetings (sec307 - sec310)
The minimum full period of notice for all meetings is 14 days, even if a special resolution is to be proposed, except for the AGM of a PLC, which is 21 days. The company's articles may require a longer period. Note that the 'clear day rule' is found in sec360.
A meeting can, however, be held on short notice, if so agreed by a majority of the members who hold at least 90% of the voting rights in a private company (or 95% in a PLC). The articles of a private company may specify any percentage between 90% and 95%.
Notice must be sent to every member, every director and anyone notified to the company as being entitled to a share on the death or bankruptcy of a member (subject to the articles).
Contents of notice (sec311, sec283(6) and sec325)
The notice must state the time, date and place of the meeting and the general nature of the business to be conducted. By sec283(6), the wording of any special resolution must also be included and the intention to move it as a special resolution. The members' rights to appoint proxies must also be stated (sec325, below).
Special notice (sec312)
Where a resolution requires special notice (on removal of a director (or removal of an auditor), 28 days' special notice must be given by the person proposing the resolution to the company. These provisions are almost identical to those under the old law. The company must notify the director or auditor concerned, and must give the members notice of such resolution in the same manner and at the same time as giving notice of the meeting. If that is not practicable, it must give at least 14 days' notice in a newspaper or in such other manner as is specified in the articles.
These provisions work well enough in the context of members giving notice of a proposal to remove a director at the forthcoming AGM of a public company, where the actual or approximate date of the meeting is known well in advance. To cover the more typical situation of a private company where there is a sudden and urgent proposal to remove a director (perhaps by the majority directors or shareholders), sec312(4) will be used. This provides:
If, after notice of the intention to move such a resolution has been given to the company, a meeting is called for a date 28 days or less after the notice been given, the notice is deemed to have been properly given, though not given within the time required. This obscurely worded sub-section, which ahs been carried over from the old Act, means that if, say, the majority director/shareholders want to remove a director from office, they can serve the special notice on the company, and then call the meeting on whatever period of notice is needed. (Full notice would be 14 days, but it could be held on short notice with the required majority consent, above.) The notice of the meeting will contain notice of the proposed resolution to remove the director, and then the 28 days' special notice is 'deemed' to have been given under this sub-section.
Accidental failure to give notice of resolution or meeting (sec313)
Where a company gives notice of a general meeting, or of a resolution intended to be moved at a general meeting, any accidental failure to give notice to one or more persons shall be disregarded when deciding whether the notice of the meeting has been duly given.
Note that this will not cover the complete omission of a resolution that should have been included in the notice of a meeting and, except for the provisions relating to notices required to be circulated by members, operates subject to any provision in the articles.
This was not previously statutory, but a provision in Table A (art. 39) covered the non-receipt of notice as well as the accidental failure to send notice of a meeting.
Circulation of members' statements (sec314 to sec317)
As under the old law, the holders of 5% of the voting rights, or any 100 members who have paid up at least £100 on their shares, can require the company to circulate a statement not exceeding 1,000 related to the proposed business of a meeting. The statement should circulated in the same manner and at the same time, or as soon as practicable after, the notice of the meeting. Those requesting the statement to be circulated must meet the company's expenses incurred in doing so, and they must deposit or tender sufficient to cover these costs: sec316. (there is an exception for a notice at the AGM of a public company requested before the end of the financial preceding the meeting.)
The company, or a person aggrieved may apply to the court for an order not to circulate the statement on the ground that these provisions are being abused.
Incorporation Services Limited provides an expert service for all your company formation and company law requirements, including all company secretarial matters such as the calling and conduct of company meetings.