Chapter 14: Meeting of the Shareholders Flashcards
(146 cards)
1
Q
Who owns a company and who manages it?
A
A company is owned by its members (shareholders).
The management of the company is delegated to the directors.
2
Q
What powers do members retain despite delegating management to directors?
A
Members can alter the company’s constitution.
They can appoint and remove directors.
They have the power to appoint and remove auditors.
They can propose and pass resolutions without the consent of directors.
They can remove directors they disapprove of.
3
Q
How were resolutions passed under CA1985, and how did CA2006 change this?
A
Under CA1985, resolutions were required to be passed at meetings of members.
CA2006 introduced the presumption that private companies will primarily use written resolutions unless certain conditions apply (e.g., removing a director or auditor).
4
Q
Can public companies use written resolutions?
A
No, public companies cannot use written resolutions under CA2006.
However, under the duomatic principle, if all members entitled to vote unanimously agree on a matter, it is binding as if passed in a general meeting.
4
Q
Who can propose a written resolution?
A
Directors, using CA2006 s.291.
Members, using CA2006 ss.292–295.
5
Q
What types of resolutions can private company members pass by written resolution?
A
Any resolution that could be passed at a general meeting can also be passed in writing except:
Removal of a director under CA2006 s.168.
Removal of an auditor under CA2006 s.510.
6
Q
When is a written resolution approved?
A
When the required majority of members have signified their agreement.
Voting is calculated based on the number of shares held (CA2006 ss.284 and 296).
6
Q
How must a company circulate a written resolution?
A
A company must send copies to all eligible members at the same time:
Hard copy
Electronic means
Website notification (CA2006 s.291(2) and (3)).
7
Q
What is the definition of an eligible member?
A
An eligible member is a member entitled to attend and vote at a general meeting (CA2006 s.289).
7
Q
How can members indicate their consent to a written resolution?
A
Members must return a signed document (hard copy or electronic) to the company (CA2006 s.296).
Once agreement is conveyed, it cannot be revoked (CA2006 s.296(
8
Q
What happens if a written resolution is not approved within 28 days?
A
It lapses, and any consent given afterward is invalid (CA2006 s.297).
9
Q
Who else must receive copies of written resolutions?
A
The company’s auditor, if one exists (CA2006 s.502(1)).
10
Q
In what situations can a company refuse to circulate a member-proposed resolution?
A
If the resolution is invalid, meaning:
It conflicts with legislation or the company’s constitution.
It is frivolous, vexatious, or defamatory (CA2006 s.292(2)).
10
Q
What percentage of members is required to propose a resolution?
A
Members holding at least 5% of the total voting rights (CA2006 s.292).
The company’s Articles may allow a lower percentage.
11
Q
Can members also circulate a statement with their resolution?
A
Yes, they can circulate a statement up to 1,000 words with the resolution (CA2006 s.292).
12
Q
What are the company’s obligations when receiving a valid request for a resolution?
A
Must circulate the resolution within 21 days (CA2006 s.293).
It must be sent in:
Hard copy
Electronic form
Website notification
13
Q
Who has the right to exercise the voting rights on a written resolution?
A
The registered member
13
Q
Who pays for the circulation of member-proposed resolutions?
A
The members proposing the resolution must pay.
The company can demand advance payment (CA2006 s.294).
However, the company may agree to bear the cost.
14
Q
Can any member request that a resolution be circulated?
A
No. The member or members must hold between them not less than 5% of the voting rights at a general meeting
14
Q
Can a company refuse to circulate a resolution on the grounds of abuse?
A
Yes, the company or an aggrieved person may apply to the court to stop circulation if the rights under CA2006 s.292 are being abused (CA2006 s.295).
15
Q
Key Takeaways
A
Private companies can pass most resolutions in writing, except those related to the removal of directors or auditors.
Public companies cannot use written resolutions under CA2006, but unanimous consent (duomatic principle) can make a decision binding.
Written resolutions must be circulated to all eligible members and the auditor (if any).
Approval requires the requisite majority based on shares held.
Members with at least 5% voting rights can propose resolutions and circulate statements at their own expense.
Companies can refuse to circulate resolutions that are invalid, frivolous, or abusive, but the court may intervene if necessary.
16
Q
On what basis can members of a public company approve a resolution other than at a general meeting?
A
By proxy or by unanimous written resolution under the duomatic principle
16
Q
In what situations do written resolutions work effectively?
A
Written resolutions are effective when a company has only a few members.
They work well if the members are responsive and easily reachable.
16
Q
What challenges arise when using written resolutions in companies with many members?
A
Difficulty in obtaining responses: Some members may be unresponsive.
Outdated member contact information: The company may no longer have current addresses for all members.
Threshold issue: A written resolution requires a majority based on total membership, not just those who vote.
17
How does a general meeting solve these challenges?
At a general meeting, the required majority is based only on those members who actually vote.
It does not depend on reaching all members, making it more practical for larger companies.
18
Under what circumstances must a private company hold an AGM?
If it is a quoted company or required by its Articles
19
What additional resolutions would a quoted company routinely add to its AGM notice?
Receipt of directors’ remuneration report, approval of directors’ remuneration policy (triennial), authority to issue shares,
waive pre-emption rights on allotment, authority to purchase own shares, approval of political donations, and authority to
convene general meetings on 14 days’ notice
19
How do general meetings differ from directors’ meetings?
Directors’ meetings: Largely left for directors to determine their own procedures.
General meetings of members: The Companies Act (CA2006) provides detailed provisions for:
Convening meetings.
Notice requirements.
Meeting proceedings.
Voting procedures, including proxy voting for absent members
20
What are the three main types of members’ meetings?
Annual General Meetings (AGMs) – Regular yearly meeting for certain companies.
General Meetings (GMs) – Any other meeting of shareholders outside the AGM.
Class Meetings – Meetings held specifically for shareholders of a particular class of shares
21
Which companies are required to hold AGMs?
Public companies (PLCs) and traded private companies must hold an AGM within six months (or nine months for private traded companies) after their accounting reference date (CA2006 s. 336).
Private companies (except traded ones) are not required to hold an AGM unless their Articles of Association require one (CA2006 s. 336(1A)).
22
Can members of private companies demand an AGM?
No statutory right for members to demand an AGM.
However, members holding at least 5% of the voting rights can requisition a general meeting (CA2006 ss. 303–305).
Members can also requisition a written resolution (CA2006 ss. 292–295)
22
Who has the authority to convene an AGM?
The directors have general authority to call general meetings, including AGMs (CA2006 s. 302).
Members cannot requisition an AGM but can requisition a general meeting (CA2006 s. 303).
The court can also order a general meeting, including an AGM.
23
What routine business is conducted at AGMs?
Receiving company reports and accounts (CA2006 ss. 437–438).
Declaring a final dividend, if any.
Election or re-election of directors:
New directors appointed since the last AGM.
Re-election of directors retiring by rotation (if required by Articles).
Reappointment and remuneration of auditors.
Approval of directors’ remuneration report (quoted companies only, CA2006 s. 439).
Approval of directors’ remuneration policy (quoted companies, every 3 years, CA2006 s. 439A).
23
What other resolutions may be put to members at an AGM?
Special resolutions:
Changes to the company’s Articles of Association (CA2006 s. 21).
Disapplication of pre-emption rights on share issues (CA2006 s. 571).
Ordinary resolutions:
Authorising directors to issue additional shares (CA2006 s. 551).
Giving shareholders the right to receive new ordinary shares instead of cash dividends.
Approving political donations (CA2006 s. 366).
24
Can members propose a resolution to appoint a new director at an AGM?
Only if the company’s Articles allow it.
No statutory right under CA2006 or Model Articles.
25
What is a class meeting?
A meeting of shareholders of a particular class of shares.
Held in accordance with the company’s Articles or the terms of the shares issued.
25
When are class meetings required?
When the company proposes changes to the rights attached to a class of shares.
Examples of changes include:
Voting rights.
Dividend rights.
Capital rights.
26
Do non-voting shareholders have the right to attend class meetings?
Yes, but only for class meetings (not general meetings).
Voting rights refer to general meetings, not class meetings.
27
Can members requisition a class meeting?
No general right for members to requisition a class meeting.
Subject to Articles of Association and Companies Act 2006 s. 334.
27
What is the quorum requirement for class meetings?
Two members holding at least one-third of the nominal value of the class shares.
For an adjourned meeting, only one member holding shares of that class is needed.
28
Key Takeaways
AGMs are required only for public and traded private companies.
Private companies can choose not to hold AGMs unless their Articles require it.
Members of private companies cannot demand an AGM but can requisition a general meeting (5% voting rights required).
AGMs handle both routine business (accounts, dividends, director elections, auditors) and special resolutions.
Class meetings are necessary when altering class rights (voting, dividends, capital distribution).
Members cannot requisition class meetings unless Articles allow it.
The quorum for a class meeting is two members holding at least one-third of shares in that class.
29
Which documents should be available for inspection by members at an AGM?
Register of members
Directors’ service contracts
Notice
29
Are amendments to resolutions allowed?
For ordinary resolutions only to correct obvious typographical mistakes, no amendments may be made to a special
resolution
30
Can members ask questions about anything?
At a general meeting any question relating to the business of the meeting, at the AGM of a quoted company questions
may be raised on any topic, however, directors only need to ensure that questions relating to the business of the meeting
are answered
30
What are the key regulations governing general meetings of members?
The requirement for companies to hold general meetings is set out in the Companies Act 2006 (CA2006) and further reinforced by the company’s Articles of Association.
31
Can a company’s Articles override statutory provisions of CA2006?
No, a company’s Articles cannot override statutory provisions where the effect would be to deprive members of rights provided by statute.
However, if the Articles provide a different procedure from the statutory position (without taking away members' rights), then the Articles may prevail.
31
Why is it important for company secretaries to be aware of the company’s Articles when dealing with general meetings?
The Articles of Association may specify different requirements from the Companies Act regarding notice periods, quorum, and meeting procedures.
In groups of companies, subsidiaries may have different provisions in their Articles, leading to variation in notice periods and quorums.
Failure to comply with the Articles could invalidate resolutions passed at a general meeting.
32
What are some key provisions in CA2006 related to general meetings?
Convening general meetings (ss. 302–306)
Directors have the power to call a general meeting.
Members with at least 5% of voting rights can requisition a general meeting.
The court may order a general meeting in certain cases.
Notice of general meetings (ss. 307–313, 325, 337, 360)
Specifies minimum notice periods.
Requires details of the meeting agenda and resolutions to be included in the notice.
Quorum requirements (s. 318) - Defines the minimum number of members required to hold a valid meeting.
Proceedings at general meetings (ss. 319–323, 341–351)
Rules on how meetings should be conducted.
Includes rules on chairing meetings, adjournments, and member participation.
Proxy appointments (ss. 282–284, 324, 331)
Members have the right to appoint a proxy to vote on their behalf.
Electronic communication (ss. 293, 299, 308, 309, 333–333A, 430, 1145, Sch. 5 paras 4 & 9)
Allows companies to use electronic means for notices and voting at meetings.
Voting procedures (ss. 282–287, 360A–360B)
Sets out rules for different types of resolutions and how votes should be counted.
32
What is the impact of different provisions in the Articles of Association on general meetings?
The statutory provisions of CA2006 take precedence if a company’s Articles attempt to remove or limit a statutory right.
However, Articles may specify different procedures for:
Notice periods for general meetings.
Quorum requirements.
Voting methods.
Use of electronic communication.
This variation makes it crucial for company secretaries to fully understand their company’s Articles when handling general meetings to ensure compliance and prevent disputes.
33
What is the role of the company secretary in relation to general meetings?
The company secretary is responsible for managing the logistical and procedural aspects of general meetings, including:
Drafting and issuing notices convening the meeting.
Ensuring pre-meeting preparations are completed.
Collating proxy forms.
Drafting a script for the chairperson.
Overseeing the smooth operation of the meeting.
Managing post-meeting follow-ups, including preparing minutes.
33
Who has the authority to convene general meetings?
The directors have the authority to convene general meetings, but the responsibility for the process and administration is usually delegated to the company secretary.
34
Why is the AGM venue selected in advance for large companies?
For companies with a large number of members, the AGM venue is often booked months in advance to:
Ensure availability.
Allow investors and stakeholders to plan attendance.
Include the date and location in corporate diaries and public disclosures.
34
What are the key pre-meeting responsibilities of the company secretary for a listed company’s AGM?
Ensuring legal and procedural compliance when calling the meeting.
Sending notices to shareholders within the prescribed timeframe.
Coordinating with auditors, directors, and key stakeholders.
Collecting and verifying proxy forms.
Preparing a script for the chairperson.
Arranging for necessary documents, voting ballots, and resolutions to be ready.
35
What are proxy rights in an AGM?
A proxy is a representative who votes on behalf of a shareholder.
Proxies have the right to speak at the meeting.
They can demand or join in demanding a poll vote on any resolution (CA2006 ss. 324 and 329).
35
What steps should the company secretary take after the AGM?
Prepare the minutes of the meeting – summarizing discussions, resolutions passed, and voting results.
Minutes do not need to be sent to all directors unless significant matters were discussed beyond routine business.
Ensure resolutions are recorded and any necessary filings are made with regulatory bodies.
Follow up on action points or directives issued during the meeting.
36
Why are minutes of the AGM important?
They serve as a legal record of decisions made.
They provide clarity on the discussions and resolutions.
They are used for regulatory compliance and internal governance.
37
What does clear days mean?
Clear days excludes the date the notice of a meeting is given, or deemed given, and the date of the meeting
37
What must a traded company have done to allow members’ meetings to be held on 14 days’ notice?
Obtained consent at the previous AGM or a general meeting held since the previous AGM
38
Do notices of general meetings need to distinguish between ordinary and special resolutions?
Yes
39
What are the statutory notice periods required for general meetings?
The Companies Act 2006 (CA2006) specifies the minimum notice periods for general meetings, which cannot be reduced by a company’s Articles (CA2006 s. 307 and s. 307A). However, companies can extend these periods if desired.
The statutory notice periods are:
General meeting of a private company – ordinary resolutions 14 days
General meeting of a private company – special resolutions 14 days
Annual general meeting (AGM) of a public company 21 days
General meeting of a public company (not traded) – ordinary resolution 14 days
General meeting of a public company (not traded) – special resolution 14 days
General meeting of a traded company where conditions are met 14 days
General meeting of a traded company where conditions are not met 21 days
Listed companies should comply with the Governance Code, which recommends a best practice notice period of 20 working days for AGMs.
39
What are the conditions under CA2006 s. 307A that allow a traded company to hold a general meeting with only 14 days' notice?
A traded company can hold a general meeting with a 14-day notice period if all the following conditions are met:
The meeting is not an AGM.
The company offers an electronic voting facility to members.
A special resolution has been passed at the preceding AGM or a general meeting authorizing the reduced notice period.
If any of these conditions are not met, a 21-day notice period applies.
40
What does "clear days" mean in the context of notice periods?
"Clear days" means that the day on which the notice is served and the day on which the meeting is held are excluded (CA2006 s. 360).
Notices sent by post or electronic means are deemed received 48 hours after posting, excluding weekends and public holidays (CA2006 s. 1147).
Companies can define different "clear days" rules in their Articles of Association, which might reduce the deemed receipt time to 24 hours if sent via first-class post.
Example Calculation:
If a private company wishes to hold a general meeting on 18 May, the latest date for posting the notice would be 1 May.
The notice is deemed served on 3 May (48-hour rule).
The 14-day period begins on 4 May and expires on 17 May.
The meeting can then take place on 18 May.
41
Can a company hold a general meeting on short notice?
Yes, CA2006 s. 307(5) allows companies to hold a general meeting on short notice if the required majority of members agrees. However, notice must still be given to all members.
Short notice requirements:
Private companies: Majority of members holding at least 90% of the voting share capital (can be increased to 95% by the Articles).
Public companies: 95% of voting share capital.
AGMs: Unanimous consent from all members entitled to vote is required.
Additional Requirement for AGMs:
If company accounts are sent less than 21 days before the AGM, members must also consent to accept late accounts.
42
Who is entitled to receive notice of a general meeting?
Under CA2006 s. 310, notice must be given to:
Every member entitled to vote.
Every director of the company.
Exceptions:
Company secretaries have no statutory right to receive a copy of the notice or to attend meetings.
Holders of preference shares or non-voting shares are not necessarily entitled to receive notice unless specified in the Articles.
Debenture holders are not entitled to vote, but listed companies often send them notices for information purposes.
In the case of class meetings, only the holders of the relevant class of shares must be given notice.
Protection Against Accidental Omission:
CA2006 s. 313 protects the validity of meetings if a member is accidentally omitted from the notice circulation.
Without this protection, even one missing notice could invalidate the meeting
43
What must be included in a notice of a general meeting?
Under CA2006 s. 311, a valid notice must include:
Time, date, and venue of the meeting.
General nature of business to be discussed.
Full text of any special resolutions to be proposed (CA2006 s. 283(6)).
Additional requirements for listed companies:
Three-way proxy voting: Members must be able to vote for, against, or abstain on each resolution (Listing Rules LR 9.3.6, 7).
Proxy appointment information must be prominently stated (CA2006 s. 325).
AGM notices must explicitly state that the meeting is an AGM (CA2006 s. 337).
44
What is special notice and when is it required?
Special notice is a 28-day notice period required for certain ordinary resolutions under CA2006 s. 312, including:
Removing an auditor before the expiration of their term (CA2006 s. 510).
Removing a director before their term ends (CA2006 s. 168).
Appointing a new director in place of a removed director at the same meeting (CA2006 s. 168).
Company’s Responsibility:
The company must notify members of a special notice resolution at least 14 days before the meeting (CA2006 s. 312(3)).
If direct notification is not practicable, the company must publish the notice in a newspaper or other permitted means.
45
If one of two members refuses to attend general meetings can a meeting be held?
Under the Model Articles no but check the Articles
46
What is a quorum, and what are the quorum requirements for members' meetings?
A quorum is the minimum number of members required to be present at a meeting for it to be validly held and for business to be transacted.
Under CA2006 s. 318, the quorum requirements are:
For a company with a sole member: The quorum is one.
For all other companies: The quorum is two members present in person or by proxy, unless the Articles specify otherwise.
Key considerations:
Articles of Association may alter quorum requirements. Some companies may require a higher minimum number of attendees for a valid meeting.
Proxies and quorum:
If a single member appoints two proxies, a quorum is not met unless another member is present.
If two members appoint the same proxy, this still does not meet quorum requirements as only one individual is physically present.
Example:
A company requires two members for a quorum. If Member A appoints two proxies and no other members attend, the meeting cannot proceed because there is still only one member represented.
46
What are meeting materials, and why are they important?
Meeting materials are documents prepared and circulated before a meeting to help members make informed decisions.
These may include:
Notice of the Meeting (including date, time, venue, and agenda).
Financial Reports & Statements.
Proxy Forms & Voting Instructions.
Explanatory Notes on Resolutions.
Board Proposals & Supporting Documents.
Why are meeting materials important?
Ensures transparency – Members have clear information ahead of the meeting.
Facilitates preparation – Allows members to review resolutions before voting.
Improves efficiency – Reduces unnecessary discussions during the meeting.
Enhances compliance – Meets legal requirements for providing full disclosure.
47
What happens if a quorum is not present?
If a quorum is not present within 30 minutes of the scheduled meeting start time:
The meeting must be adjourned.
The chair must:
Specify a new time and place for the adjourned meeting.
OR allow the directors to decide on a new time and place later (Model Articles Plc reg. 33, Ltd reg. 41).
If a quorum was present at the start but later ceases to exist:
The meeting must be adjourned automatically (Model Articles Plc reg. 39, Ltd reg. 39).
Practical Issue:
Companies with few members and routine business at AGMs sometimes struggle to meet quorum requirements because members choose not to attend in person, instead appointing the chair as a proxy.
Case Study Example:
A company’s chair was the only member present, but he also held all the proxy nominations. As a result, a quorum was not met. However, the Articles allowed proxies to be appointed up until the start of the meeting. The chair quickly appointed another director as his proxy, thereby satisfying the quorum requirement and allowing the meeting to proceed.
47
What is the importance of an agenda in a members' meeting?
An agenda is a structured list of topics that will be discussed and voted upon at the meeting. It helps ensure:
Clarity on key issues to be addressed.
Efficient time management during discussions.
Proper documentation of decisions made.
A standard AGM agenda typically includes:
Welcome & Chair’s Introduction.
Approval of Previous Meeting Minutes.
Presentation of the Annual Report & Financial Statements.
Declaration of Dividends (if applicable).
Election/Re-election of Directors.
Appointment/Reappointment of Auditors.
Special Resolutions (if any).
Any Other Business (AOB).
Closing Remarks & Adjournment
47
What should the company secretary do before, during, and after a general meeting?
Before the Meeting:
Confirm quorum requirements based on Articles.
Prepare and circulate meeting materials (agenda, reports, proxy forms, etc.).
Ensure notice is served correctly with the required notice period.
Confirm venue booking (for large companies, venue may be booked a year in advance).
Collect proxy forms and check they comply with regulations.
Draft chair's script to guide the meeting.
During the Meeting:
Check attendance and quorum.
Record proxy votes and ensure they are valid.
Ensure agenda items are covered and resolutions are properly voted on.
Maintain order and compliance with the Articles and Companies Act.
After the Meeting:
Prepare meeting minutes summarizing discussions and decisions.
File resolutions with Companies House (if required).
Distribute minutes and follow up on action items.
48
How does proxy voting impact quorum and decision-making?
A proxy is a person appointed by a member to attend the meeting and vote on their behalf. Proxy rules are governed by CA2006 ss. 324 and 329.
Key rules about proxies:
Proxies have the same rights as members to speak, vote, and demand a poll.
Multiple proxies can be appointed by one member, but they do not count separately towards quorum.
Deadline for proxy appointment is often 48 hours before the meeting (excluding weekends and public holidays).
In listed companies, shareholders must be given three-way proxy voting options:
Vote "For"
Vote "Against"
Abstain
Quorum & Proxies:
If all attending members are proxies representing only one shareholder, quorum is not met.
If one member appoints another director as their proxy, quorum is valid.
49
What is the key difference between an ordinary and a special resolution of the members?
Ordinary resolution is approved by a simple majority and a special resolution requires a 75% majority
49
What advantage does passing a resolution at a meeting have compared to the same resolution circulated as a
written resolution?
At a meeting the majority is of those voting and on a written resolution it is of the entire voting share capital
50
What are the different types of resolutions in a company meeting?
Resolutions are formal decisions made by members at a general meeting or through a written resolution.
There are two main types of resolutions:
Ordinary Resolutions – Passed by a simple majority (more than 50%).
Special Resolutions – Require at least 75% approval of those voting.
The key difference between resolutions passed at a meeting versus by written resolution is:
At a meeting, majorities are based on votes cast by those present (including proxies).
By written resolution, majorities are based on the total number of shares issued.
This means that if members at a meeting choose not to vote on certain resolutions, the required majority can vary.
51
What is an ordinary resolution, and when is it used?
An ordinary resolution is a resolution passed with a simple majority (more than 50%) of votes cast by members present (in person or by proxy).
Common uses of ordinary resolutions include:
Appointment or re-appointment of directors.
Re-appointment of auditors.
Changes to share capital (CA2006 ss. 617, 618).
Capitalisation of profits (issuing bonus shares).
Granting authority to directors to issue new shares (CA2006 ss. 550, 551).
Authorising directors to offer shareholders the right to receive shares instead of cash for dividends (subject to Articles).
52
Who chairs the meeting if the designated chair is absent?
The company’s Articles determine who chairs a meeting.
The chair of the board is typically the chair of general meetings.
If the chair is absent, another director (e.g., deputy chair or vice-chair) will chair the meeting.
If no directors are present, members attending the meeting elect one of their number to act as chair.
Key Reference: Model Articles Plc reg. 39, Ltd reg. 31
52
What is a special resolution, and when is it required?
A special resolution requires at least 75% of members (present and voting) to approve it.
Key requirements for a special resolution:
The notice of the meeting must state that the resolution is a special resolution.
At least 14 days’ notice is required for private companies.
Traded companies require 21 days’ notice unless a resolution to shorten the notice period (to 14 days) has been passed.
Common uses of special resolutions include:
Changing the Articles of Association (CA2006 s. 21).
Changing the company’s name (CA2006 s. 77).
Disapplying pre-emption rights on new share issues (CA2006 s. 571).
Reducing share capital (CA2006 s. 641).
52
Key Takeaways
Ordinary resolutions are passed with a simple majority (50%+1) and cover routine business.
Special resolutions require 75% approval and involve more significant decisions like changing the Articles.
Amendments to ordinary resolutions are allowed if they stay within scope, but special resolutions can only be amended for clerical errors.
A resolution can be withdrawn before voting, but listed companies should announce withdrawals publicly.
The number of members present affects the voting majority required for approval.
52
What are the rules for amending or withdrawing resolutions?
Amendments:
Ordinary resolutions can be amended at a general meeting, provided the amendment:
Falls within the scope of the original notice.
Is not irrelevant or inconsistent with the original resolution.
Is not redundant (negating the resolution or repeating something already voted on).
Is not vexatious or disruptive to the meeting.
Special resolutions generally cannot be amended, except for minor grammatical or clerical corrections.
Voting on amendments:
Members must first vote on whether to allow the amendment.
If the amendment is approved, the final vote is taken on the amended resolution.
If multiple amendments are proposed, they are voted on in the order proposed.
Withdrawal of a Resolution:
A resolution can be withdrawn before a vote is taken.
The director or proposer of the resolution simply announces that the resolution is withdrawn.
Listed companies should announce withdrawals publicly if known in advance, stating the reasons.
53
Practical Example of Voting at a Meeting
Imagine a company holds a general meeting with 100 shareholders, but only 60 attend (either in person or by proxy).
Ordinary Resolution:
Requires 51% approval of those voting.
If only 50 members vote, at least 26 must vote in favour for it to pass.
If 10 shareholders abstain, the majority is calculated based on the 50 who voted.
Special Resolution:
Requires 75% approval of those voting.
If 50 shareholders vote, at least 38 must vote in favour.
If 10 shareholders abstain, the calculation is still based on the 50 votes cast.
Important: Abstentions are not counted as votes against but reduce the overall number of votes required.
53
Can proxies speak at meetings?
Yes
53
Who has authority to adjourn a general meeting?
The Chair.
54
What is the primary role of the chair at a members' meeting?
The chair’s main responsibility is to ensure that the meeting is properly and fairly conducted while allowing all members to express their views.
The chair must:
Ensure all opinions are heard.
Keep the meeting orderly and efficient.
Ensure that voting and decisions are properly recorded in the minutes.
Make sure that the meeting’s resolutions accurately reflect the sense of the meeting.
54
What powers does the chair have during a members' meeting?
The company’s Articles of Association usually grant the chair specific powers to manage the meeting effectively.
These powers include:
Authority to adjourn the meeting – if necessary for order or safety.
Ruling on points of order – determining what is relevant and appropriate discussion.
Deciding the validity of votes – ensuring only valid votes are counted.
Declaring the results of resolutions on a show of hands – announcing the outcome.
Ejecting members for unruly behaviour – maintaining order.
Deciding on the validity of amendments to resolutions – ensuring proposed changes are appropriate.
Demanding a poll vote – if necessary for a more accurate result.
Key Reference: These powers are outlined in Model Articles Plc reg. 39 and Ltd reg. 31.
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Under what circumstances can the chair adjourn a meeting?
The chair can adjourn a meeting in two ways:
With the consent of the meeting – Normally, the chair should seek members’ approval before adjourning.
Without seeking consent – The chair may adjourn unilaterally if:
It is necessary to protect the safety of attendees.
It is essential for maintaining order in the meeting.
Important: The chair cannot close a meeting before all matters on the notice have been discussed. Only the members can decide to end a meeting early.
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Why is it important for the chair to allow all points of view to be expressed?
One of the key purposes of holding a general meeting is to ensure that:
All members have the opportunity to share their views.
A fair discussion takes place before any decision is made.
Decisions reflect the interests of the majority of members.
The chair must remain neutral and impartial, ensuring that all members (not just the majority shareholders) have the chance to contribute to discussions.
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Key Takeaways
The chair manages and moderates the meeting, ensuring it runs fairly and efficiently.
They have powers such as ruling on points of order, adjourning the meeting, and maintaining discipline.
If the chair is absent, another director or an elected member takes over.
The chair can only adjourn a meeting without consent if safety or order is at risk.
The chair must allow all viewpoints to be expressed to ensure a democratic process.
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What is the purpose of rules of order and standing orders in a meeting?
Rules of order and standing orders ensure that:
Meetings are conducted fairly and efficiently.
All points of view are expressed and debated properly.
Time-wasting tactics (e.g., excessively long speeches) do not disrupt the meeting.
The sense of the meeting is properly obtained.
Key Issue: In contentious meetings, certain members may try to stall discussions by giving lengthy speeches or disrupting the process. To counter this, the chair may use procedural motions to maintain order.
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Who has the right to speak at a members' meeting?
All members, proxies, and corporate representatives who are entitled to attend and vote have the right to speak.
However, the chair has the authority to:
Limit speaking time to keep the meeting efficient.
Prevent repetitive speeches that add no new information.
Ensure that differing opinions are fairly expressed.
Special Rule for Traded Companies:
All member questions must be answered, except in cases where:
It interferes with meeting preparations.
It requires disclosure of confidential information.
The question has already been answered (e.g., on a company website).
Answering the question would be against the company’s interests or disrupt the meeting (CA2006 s. 319A).
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What are procedural motions, and why are they used?
Procedural motions are special types of resolutions used to regulate how a meeting is conducted.
Purpose: To manage discussions, control disruptions, and maintain efficiency.
Used rarely in routine meetings, but important in contentious situations.
There are six common procedural motions:
The Closure ("That the question be now put") – Forces an immediate vote on the current issue.
Next Business ("That the meeting proceeds to the next business") – Ends discussion and moves to the next agenda item.
Previous Question ("That the question be not now put") – Delays or avoids taking a vote on a resolution.
Postponement (Version 1) ("That the question lie on the table") – Temporarily suspends discussion.
Postponement (Version 2) ("That the matter be referred back to…") – Refers the issue back for further review.
Adjournment – Suspends the meeting, either temporarily or permanently.
Important: The terminology of procedural motions can seem complex and outdated, but they are essential tools for maintaining order in contentious meetings.
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What are the rules for adjourning a general meeting?
Who can adjourn?
The chair may adjourn without consent in cases of disorder or safety concerns.
Otherwise, the members attending the meeting must approve the adjournment.
Rules for adjourned meetings:
Model Articles Plc reg. 33(6):
Only unfinished business from the original meeting can be discussed.
If the meeting is adjourned for more than 14 days, fresh notice of at least 7 days must be given.
The notice must specify the business to be transacted at the adjourned meeting.
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Key Takeaways
Rules of order and procedural motions help regulate meetings, especially in contentious situations.
Speaking rights are guaranteed, but the chair may limit discussion to maintain order.
Traded companies must answer all relevant questions, unless specific exceptions apply.
Adjournments must follow clear rules, with fresh notice required for longer adjournments.
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What is the maximum period before a general meeting for the cut-off for the receipt of forms of proxy by the
company?
48 hours (excluding non-working days)
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What options does a corporate member have in order to cast their vote at a general meeting?
Appointment of corporate representative or appointment of a proxy
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How many proxies can an individual member appoint?
As many as they like but proxies must represent different shares
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What are proxies, and why are they important in company meetings?
A proxy is a person appointed by a shareholder to attend, speak, and vote on their behalf at a company meeting.
Key Features of Proxies (CA2006 s. 324):
Shareholders can appoint multiple proxies, but each proxy must be assigned different shares.
A proxy does not need to be a shareholder.
The right to appoint proxies must be stated in the notice of the meeting (CA2006 s. 325).
Proxies can vote on a show of hands or a poll.
A proxy’s appointment applies only to the specific meeting or its adjournment.
Practical Importance:
Ensures that shareholders who cannot attend in person can still participate in decision-making.
Helps increase shareholder engagement, especially for large or international companies.
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What are the rules for submitting proxy forms?
Key Regulations (CA2006 ss. 326–327):
Issuance:
Unlisted public and private companies are not required to send proxy forms with meeting notices.
If proxy forms are issued, they must be sent to all shareholders (not just those who support the board).
Deadline for Submission:
Proxies must be submitted no later than 48 hours before the meeting, excluding non-working days (CA2006 s. 327).
Companies can accept last-minute proxies if they are in the correct format.
Electronic Submission:
Allowed only if sent to the company’s designated email address (CA2006 s. 333).
Traded companies must provide an electronic submission address (CA2006 s. 333A).
Invalid Proxy Submission:
A proxy sent to a general email (e.g., the company secretary’s email) is not valid unless the company has designated it as an official submission address.
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What are three-way proxies, and why are they required for listed companies?
Definition: A three-way proxy allows shareholders to indicate whether they vote for, against, or abstain from a resolution.
Regulations for Listed Companies (LR 9.3.6):
The proxy form must allow voting in all three options (for, against, or abstain).
If a shareholder abstains, it is not counted as a ‘for’ or ‘against’ vote.
The proxy form must include all resolutions listed in the meeting notice.
Shareholders must be free to appoint any proxy, not just the chair or directors.
Importance:
Enhances transparency in voting.
Ensures shareholders' voting preferences are correctly represented.
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What happens when a shareholder appoints a proxy but later attends the meeting?
A shareholder who has appointed a proxy can still attend the meeting and vote in person.
Their attendance automatically revokes the proxy appointment unless the company’s Articles state otherwise.
Key Rights of Proxies (CA2006 ss. 324, 329):
Right to attend, speak, and vote at the meeting.
Right to demand a poll on any resolution.
If poll voting is permitted in advance, the proxy must attend the meeting in person to vote.
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How are proxy forms handled before the meeting
Sorting and Checking:
Proxy forms should be sorted, checked, and recorded as they arrive.
Incorrectly completed forms must be rejected, but shareholders should be contacted for corrections if time allows.
A running tally of votes should be kept to monitor potential contentious resolutions.
Company Response to Close Votes:
If a resolution appears likely to fail or be contested, the board may contact major shareholders to encourage voting.
Who Signs Proxy Forms?
Individual shareholders must personally sign their proxy forms.
Corporate shareholders must submit proxies according to their Articles and provide necessary authorizations.
Key Issue: Over Voting
Problem: When pooled nominee accounts submit more votes than shares they own due to active stock trading.
Solution: The company registrar must contact the nominee holder to resolve discrepancies.
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What are the rules for proxy voting confirmation?
The Companies (Shareholders’ Rights to Voting Confirmations) Regulations 2020 (SI 2020/717) introduced new rules for traded companies.
Electronic Voting Confirmation (CA2006 s. 360AA):
Companies must send confirmation when a shareholder, proxy, or corporate representative votes electronically on a poll.
Confirmation must be sent as soon as reasonably practicable.
Shareholder Right to Request Voting Confirmation:
A shareholder can request confirmation that their vote was counted.
The company must provide confirmation within 15 days if:
The request is made within 30 days of the meeting.
The shareholder has no other way to verify that their vote was counted.
Purpose:
Ensures trust and transparency in corporate voting processes.
Aligns the UK with EU Shareholder Rights Directive II standards.
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Key Takeaways
Proxies allow shareholders to participate in meetings without being physically present.
Proxy submissions must follow strict deadlines and format requirements.
Listed companies must provide three-way proxy forms to ensure transparent voting.
Voting confirmations are required for electronically submitted poll votes in traded companies.
Close votes should be monitored, and invalid proxy forms corrected where possible.
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What strategies do opposition groups use in contentious resolutions?
When a resolution is contentious, requisitioned, or influenced by a pressure group, opposition groups often use strategic proxy voting tactics.
Common Strategies:
Late Proxy Submission:
Groups collect completed proxy forms and submit them just before the deadline.
This prevents the company from contacting members to persuade them to change their votes.
Pre-Completed Proxy Forms:
Pre-filled forms are circulated to members for signatures.
Ensures members vote in line with opposition group recommendations.
Risk of Late Proxy Submissions:
The company may argue that members did not make independent decisions if they signed pre-filled proxy forms.
Directors could reject proxy forms that are not in the approved format.
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Why do opposition groups delay proxy submission?
Key Reasons for Late Proxy Submission:
Prevents the company from persuading members to change their votes.
Avoids lobbying by directors to influence undecided members.
Ensures that a large bloc of votes appears suddenly, potentially swinging the resolution outcome.
Company Counteractions:
Directors may scrutinize and challenge proxy forms for validity.
Invalid proxies may be rejected, particularly if not in the correct format.
Companies may argue that members were not properly informed before signing
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What are the risks of using pre-filled proxy forms?
Risks for Opposition Groups:
Directors may claim members were coerced into signing forms without understanding the resolution.
Forms may be ruled invalid if they do not match the company’s standard proxy format.
Legal challenges could arise over whether members were given full discretion to vote.
How Opposition Groups Mitigate Risks:
Ensuring that members fully understand the resolution before signing.
Using legally compliant proxy formats to prevent rejection.
Submitting proxies before the last minute to allow time to address challenges.
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What is a poll in the context of general meetings?
A poll is a voting method at a general meeting where members cast their votes based on the number of shares they hold as of the record date.
Key Features of a Poll Vote:
Votes are weighted by shareholding rather than being one vote per member.
Votes can be cast electronically, by ballot, or through proxies.
Often used for significant resolutions or contentious matters.
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Who can demand a poll?
The right to demand a poll is governed by the company’s Articles of Association and CA2006 (s. 321 & s. 329).
Under CA2006, a poll can be demanded by:
Not fewer than five members.
A member or members holding at least 10% of total voting rights.
A member or members holding shares with at least 10% of the total paid-up share capital.
Restrictions:
The right to demand a poll cannot be excluded by the company’s Articles except for electing the chair or adjournments.
Proxies can demand a poll on behalf of their appointing members (CA2006 s. 329).
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When and how can a poll be demanded?
Timing of a Poll Demand:
A poll must be called before or immediately after the chair declares the result of a show of hands.
The request must be valid and properly submitted by eligible members.
Procedure for Checking Validity:
Verify that the requestors are legitimate members.
Confirm they meet the 10% voting rights/shareholding threshold.
If the demand is invalid, the chair rejects the request and the meeting continues.
If valid, the chair announces the poll and the voting process begins.
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How is a poll conducted?
Steps in the Poll Process:
Chair announces poll and explains procedures.
Ballot papers are distributed to members present.
Members cast votes, specifying how many shares they are voting.
Ballot papers are collected and verified by scrutineers, auditors, or share registrars.
Votes are counted (including proxy votes).
Results are certified and announced by the chair.
Poll Timing Considerations:
Polls are usually held at the end of the meeting.
Polls on procedural motions (e.g., adjournments) must be taken immediately.
If new information arises, the company may schedule the poll for a later date.
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Can the chair eject a disruptive member?
Yes, but only in extreme cases where:
The disruption prevents the meeting from proceeding.
The member refuses to comply with reasonable instructions.
Ejection is a last resort – efforts should be made to resolve conflicts amicably.
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How do electronic poll votes work?
Many FTSE100 companies now use electronic voting during general meetings.
Benefits of Electronic Poll Voting:
Faster voting process – results are available almost immediately.
Votes are linked to individual members via hand-held devices.
Reduces errors in vote counting.
Includes proxy votes given to the chair automatically.
Legal Requirement for Traded Companies (CA2006 s. 360AA):
Companies must acknowledge receipt of electronic poll votes.
Confirmation must be sent to the voter, proxy, or corporate representative who submitted the vote.
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How are poll results published?
Different disclosure rules apply depending on the type of company.
Publication Requirements (CA2006 s. 341 & s. 353)
Company Type Information to Publish Deadline Retention Period
Quoted (Non-Traded) Date, resolution details, votes for/against As soon as practical At least 2 years
Traded Company Date, resolution, votes cast, issued capital proportion, abstentions Within 16 days At least 2 years
📌 Growing Trend of Poll Voting:
93% of FTSE100 companies conduct votes by poll only rather than by show of hands.
Increasing use of electronic voting across large listed companies.
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Can proxies vote both for and against the same resolution?
Only if they represent different members or different shares of the same member
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1. Can a member appoint more than one proxy?
Yes
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If a member’s proxy does not attend the meeting are their votes still counted as recorded on the proxy appointment form?
No
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How can a corporate member attend a general meeting?
A corporate body can appoint a representative to attend a company meeting by passing a resolution of its directors (CA2006 s. 323).
Key Differences Between Corporate Representatives & Proxies:
Corporate Representative
Appointment Process Appointed via board resolution
Document Requirement Brings letter of appointment to the meeting
Voting Rights Can vote without prior submission of details
Flexibility More flexibility at the meeting
Proxy
Appointment Process Must be pre-registered with the company
Document Requirement Must submit a proxy form in advance
Voting Rights Votes are lodged in advance with the company
Flexibility Bound by pre-submitted instructions
Issue with Nominee Accounts:
If multiple corporate representatives are appointed under the same nominee account without clear voting instructions, it can cause voting complications.
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Can a company refuse entry to a shareholder?
Yes, but only in reasonable circumstances, such as:
Carrying weapons or offensive materials.
Demonstrating hostile or disruptive behavior.
Security threats to other attendees.
However, refusal of entry is rare and only used as a last resort.
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How can an individual (natural person) member attend a meeting?
Requirements for Attendance:
Simply show up at the meeting – No pre-registration required.
May need to show identification at high-profile or previously disrupted meetings.
Can appoint a proxy to attend, speak, and vote on their behalf if they cannot attend in person.
Important Notes on Proxy Attendance:
The proxy appointment must be notified in advance.
A proxy who arrives without prior notification may be denied voting or speaking rights.
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How can a chair deal with disruptions at general meetings?
The chair is responsible for maintaining order and ensuring that all views are expressed while keeping the meeting on track.
Chair’s Responsibilities in Managing Disruptions:
Allow members to raise concerns in a structured manner.
Balance order, discipline, and fair discussion.
Use their authority to handle tactics that could frustrate the meeting’s purpose.
Legal Basis:
The Articles of Association typically outline the chair’s authority over meeting procedures.
The Governance Code encourages shareholder participation, so the chair must ensure order without restricting legitimate debate.
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What, if any, are the practical differences between voting on a show of hands and on a poll?
On a show of hands each member has one vote on a poll each member has the number of votes attached to their shares – usually one vote per share
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What happens in the case of a tied vote?
In many older companies, the Articles of Association give the chair a casting vote to break a tie.
In modern corporate governance, many companies no longer allow a casting vote to ensure greater fairness.
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Must a chair always call for a poll?
If a poll is validly demanded by members, yes, in other circumstances the chair has discretion but does have a duty to ensure that the sense of the meeting is correctly recorded.
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What happens if there is significant opposition to a resolution?
UK Corporate Governance Code (Provision 4) states that if more than 20% of shareholders vote against a resolution, the company must:
Explain what actions they will take in response.
Publish an update within six months on shareholder views and company actions.
Include a final summary in the next year’s annual report.
Why was this rule introduced?
Ensures greater transparency and accountability in company decision-making.
Helps bridge the gap between company boards and shareholder expectations.
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How are resolutions typically voted on at general meetings?
The majority of companies use a show of hands as the default voting method for resolutions.
In cases where a resolution is defeated on a show of hands, and the chair is aware of a substantial number of proxy votes in favor, they should demand a poll.
Key Differences Between Show of Hands & Poll Votes:
Show of Hands Each member (or proxy) has one vote regardless of shares held Fast but does not reflect shareholding size
Poll Vote Votes are proportional to the number of shares held More accurate reflection of shareholder views
Chair's Role Must ensure that all available votes are counted Cannot manipulate the outcome based on personal views
Legal Obligation:
CA2006 s. 324A: Proxy holders must vote as instructed by the appointing member.
CA2006 s. 320: The chair’s declaration of the result is final unless fraud can be proven.
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If an abstention is a not a vote, why do some members insist on ensuring their abstention is recorded?
To demonstrate dissatisfaction
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How has digital voting promoted the use of poll voting as a matter of course?
Digital technology has enabled almost instantaneous vote count whereas a manual count can take hours
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What is the legal status of an abstention?
An abstention is NOT a vote under the Companies Act 2006. CA2006 ss. 282(3), 282(4), 283(4), and 283(5):
A majority is calculated only based on those who actually vote.
Abstentions do not affect whether a resolution passes or fails.
Why do shareholders abstain?
Protest vote – Shareholders may wish to show disapproval without voting against the resolution.
Lack of conviction – Shareholders may feel they do not have enough information to vote either way.
Corporate governance impact: Many institutional investors use abstentions to highlight concerns about a company’s governance practices.
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What is the Public Register for shareholder votes?
Launched by the Investment Association in 2017 at the UK Government’s request.
Records significant votes (20% or more against) and withdrawn resolutions for FTSE All-Share companies.
Helps investors track corporate governance issues and board performance.
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In order to constitute a valid meeting, what must all attendees be able to do?
Participate in the meeting, to hear the speakers and to be able to ask questions
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What is electronic voting, and when is it used?
Electronic voting allows shareholders to vote using digital devices rather than paper ballots.
It is popular among companies with large attendance at general meetings.
Increasingly used for smaller meetings as technology becomes cheaper.
How It Works:
Each shareholder receives a voting handset at check-in.
The handset is linked to their shareholder account.
Votes are cast electronically, and results are instantly recorded.
Advantages:
Speed – Instant result declaration.
Accuracy – Reduces manual counting errors.
Efficiency – Useful for procedural resolutions where all must vote.
Limitations:
Not suitable for very small meetings where a manual poll would be faster.
Technical setup costs may outweigh benefits for companies with low attendance
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How has technology impacted the way general meetings are conducted?
echnology has improved voting mechanisms, proxy appointments, meeting accessibility, and remote participation.
Key advancements include:
Electronic voting
Online proxy submission
Audio-visual conferencing
Hybrid and virtual meetings
Impact of Technology:
Electronic voting Speeds up vote counting and declaration of results Not cost-effective for small meetings
Online proxy submission Convenient and accessible Must comply with CA2006 s. 333A
Audio-visual conferencing Enables remote attendance and participation Risk of system failures requiring adjournment
Hybrid meetings Combines physical and remote participation Requires strong technical infrastructure
Virtual meetings Allows participation from anywhere Generally discouraged unless legally authorized
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How does online proxy submission work?
Online proxy submission allows shareholders to appoint proxies electronically instead of by paper forms.
It has been possible for years via:
CREST settlement system (used for UK securities).
Company or share registrar websites.
Legal Requirement (CA2006 s. 333A):
Traded companies MUST provide an electronic address for proxy-related documents.
Benefits:
Convenient for shareholders who cannot attend.
Reduces paperwork and speeds up processing.
Ensures compliance with regulatory deadlines.
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What is audio-visual conferencing, and is it legally valid?
Audio-visual conferencing allows members to participate remotely via video and audio links.
Legally valid under Byng v London Life (1989) if:
Participants can see and hear the chair and other speakers.
They are “in each other’s presence” electronically.
Potential Issues:
System failures can cause disruptions leading to meeting adjournments.
Technical difficulties could prevent some members from fully participating.
Practical Uses:
Suitable for AGMs and GMs with international shareholders.
Often used to connect multiple physical locations.
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What was the impact of COVID-19 on meeting formats?
During 2020, COVID-19 restrictions prevented shareholders from attending meetings in person.
The UK Government introduced temporary legislation (CIGA2020) to allow closed meetings.
Many companies shifted to hybrid or fully virtual meetings.
Key Changes Due to COVID-19:
Legal Status During COVID-19
Closed Meetings Allowed under CIGA2020 (expired March 2021)
Hybrid Meetings Legally permitted if Articles do not prohibit
Fully Virtual Meetings Required explicit approval in Articles
Future Trend
Closed Meetings Unlikely to continue post-pandemic
Hybrid Meetings Expected to become standard practice
Fully Virtual Meetings Generally discouraged unless legally authorized
Post-COVID Impact:
Companies must balance accessibility with legal requirements.
Institutional investors prefer hybrid over fully virtual meetings.
Proxy voting agencies recommend keeping a physical element for transparency.
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What are hybrid meetings, and why are they becoming popular?
Hybrid meetings combine physical meetings with an online participation option.
Allows shareholders to:
Attend in person OR join remotely via an online portal.
See and hear meeting presentations.
Ask questions and vote electronically.
Growth of Hybrid Meetings:
First fully electronic UK AGM: Jimmy Choo plc (2016).
Became more common during COVID-19 when in-person attendance was restricted.
Expected to become the norm post-pandemic.
Legal Considerations:
Hybrid meetings are allowed unless the company’s Articles specifically prohibit them.
Purely virtual meetings require explicit authority in the Articles.
Companies must ensure real-time voting and participation are possible.
Advantages:
Increases shareholder participation (especially for international investors).
Reduces travel costs for directors and shareholders.
More environmentally friendly than fully physical meetings.
Challenges:
Requires strong technology infrastructure.
Connectivity issues can disrupt participation.
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What are the key requirements for hybrid or virtual meetings?
For hybrid meetings: No special approval needed if the Articles do not prohibit them.
For fully virtual meetings: Articles must contain explicit permission.
Legal & Practical Considerations:
Hybrid Meeting
Articles must allow it Not required (unless prohibited)
Real-time voting Required
Real-time speaking rights Required
Technology infrastructure Essential
Investor acceptance Generally supported
Virtual Meeting
Articles must allow it Required
Real-time voting Required
Real-time speaking rights Required
Technology infrastructure More complex
Investor acceptance Less favored
Decision Factors for Companies:
Shareholder engagement – Will it increase participation?
Cost-benefit analysis – Is the expense justified?
Legal and governance compliance – Are Articles updated?
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What is the role of the scrutineer?
The scrutineer is responsible for:
Verifying the voting results from the meeting.
Preparing a final voting report for the chair of the meeting.
Key Duties:
Ensuring vote counting is accurate.
Validating that voting procedures comply with regulations.
Reporting on any irregularities in the voting process.
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What are a company’s obligations to communicate with members before a general meeting?
Main communication requirements:
Issuing the notice of the meeting.
Providing a circular and proxy form if necessary.
Ensuring all eligible shareholders receive meeting materials.
Legal Requirements:
Auditors must receive meeting notices if resolutions relate to them (CA2006 s. 502(2)).
Share registrars may attend to assist the company secretary.
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What is the role of the share registrar in general meetings?
Traded companies with a large number of shareholders rely on their share registrars to:
Register attendees at the meeting.
Count votes (either on a show of hands or poll vote).
Ensure accuracy in voting procedures under the oversight of the company secretary.
Note: Historically, some companies used accounting/auditing firms to scrutinize proxy votes, but this practice has declined.
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What are a company’s obligations to communicate with members after a general meeting?
No statutory requirement to inform members of voting results.
However, listed companies must:
Announce voting results to the market (e.g., via the Regulatory Information Service).
Best Practice:
Public companies should publish voting results on their website.
Include details of significant votes against resolutions in annual reports.
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What are shareholder forums, and why have they become more common?
Shareholder forums are informal gatherings where companies:
Engage with shareholders outside of AGMs.
Discuss issues and collect shareholder feedback.
Demonstrate engagement for s. 172 reporting (duty to promote the success of the company).
Reasons for Growth:
COVID-19 restrictions limited AGM participation, making forums an alternative.
Increased pressure for transparency from shareholders.
Legal Considerations:
Forums are not formal general meetings and are not regulated under the Companies Act.
Risk: Unintentional disclosure of price-sensitive information.
Best Practice: Companies should prepare a disclosure statement in case sensitive information is shared.
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Under what circumstances can shareholders request an independent proxy report?
Members of a quoted company can demand an independent assessment of a poll vote if:
At least 5% of total voting rights support the request.
A minimum of 100 members, each holding shares with at least £100 paid up, make the request.
Legal Requirements (CA2006 s. 342):
The request must be in writing or electronic form.
It must specify which poll vote the report relates to.
It must be authenticated by the members making the request.
The request must be submitted within 7 days of the poll vote.
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What are the duties of an independent assessor?
If an independent assessor is appointed, they must determine:
Whether voting procedures were followed correctly.
If votes were accurately recorded and counted.
Whether proxy appointments were correctly processed.
If the notice complied with CA2006 s. 325 (right to appoint proxies).
If the proxy forms met CA2006 s. 326 requirements.
Restrictions on the Assessor (CA2006 ss. 343-344):
Cannot be a company officer or employee.
Cannot be a partner or employee of an officer of the company.
Must not have had any involvement in the vote counting.
Rights of the Assessor (CA2006 s. 348-349):
Can attend the meeting and poll counting process.
Has access to all voting records.
