Chapter 5 Flashcards
(7 cards)
What is a record date
It is a date which the company determines the identity of all its shareholders and their shareholdings. It determines the shareholders rights.
A record date may be set by a board of directors to determine which shareholders are entitled to the following
1- To receive notice of the shareholders meeting.
2- To participated and vote in shareholders meeting.
3- To determine any matter by written consent or electronic communication.
What is representation by proxy
A proxy is a person who has been appointed by a shareholder to act on his behalf and represent him during his absence at a shareholders meeting. The appointment must be done in writing and signed by the shareholder and remains valid for one year after the date which it was signed. A shareholder may appoint two or more persons concurrently as proxies for them to exercise voting rights attached to different shares.
What is a quorum
Unless a companies MOI says otherwise, a shareholders meeting may not begin until sufficient persons are present at the meeting to exercise at least 25 percent of all voting rights. A MOI may specify a higher or a lower number in place of the default number.
What are the matters that must be discussed at an Annual General Meeting
1- The presentation of the directors report and the financial statements of the preceding year.
2- The election of new directors.
3- The appointment of an auditor as well as a new audit committee.
4- Any matter raised by the shareholders.
What is ordinary resolution and special resolution
1- Ordinary resolution is adopted with the support of more than 50 percent of the voting rights exercised on the resolution either at the shareholders meeting or by holders of the companies securities.
2- Special resolution is adopted with the support of at least 75 percent of the voting rights exercised in the resolution at a shareholders meeting or by holders of the companies securities.
The MOI in respect of both resolutions can specify different percentages in respect of different transactions.
What are the important principles that apply to a shareholders meeting
1- Before the meeting can be held it must be properly called and convened.
2- It must be called by a person who has the relevant authority to call and convene the meeting.
3- Notice convening a meeting must be give to all the persons entitled to receive notice of the meeting.
4- The meeting must be convened for a time, date and place accessible to all the shareholders.
5- A meeting can only commence if the quorum is present.
