s 303 provides that the directors are not deemed to have
duly convened a meeting if they convene it for more
than 28 days after the date of the notice convening the
meeting. So if they called it to be held, say, six months
after the date of the notice they would not have com-
plied with the Act and the requisitionists could call it.
It should be noted that the above provisions refer to
‘holders’ of shares and ‘requisitionists’. One member
with one-tenth or more of the paid-up share capital can-
not therefore ask for an EGM to be held. Two members
holding at least one-tenth of the paid-up share capital
are required. This is to ensure that there will be a quo-
rum at any meeting which is called and the provision of
the Interpretation Act 1978 that the singular includes
the plural and vice versa does not apply because of this
(see Morgan v Morgan Insurance Brokers Ltd(1993)).
Private company changes
The percentage required for a public company remains
as above at 10 per cent. However, in private companies
the percentage is reduced to 5 per cent where no requisi-
tioned meetings have been held in the last 12 months.
Requests in electronic form are permitted.Convening of meetings in deadlocked
companies
In the smaller private company a problem that may arise
if the shareholders have fallen out is that a majority
shareholder is unable to exercise control of the company
because a non-controlling member will not attend a
meeting to put policies into effect. Where this situation
exists it is important to note that the controlling share-
holder can achieve an effective meeting as follows:
■Under s 306the court can call extraordinary meetings
and the AGM and direct that one member of the com-
pany present in person or by proxy shall constitute a
quorum and validly conduct business. Application is
by a director or member.
It should be noted that the above power is not intended
to sort out problems between shareholders simply
because they have equal shareholdings. Thus, if in a
company with two members, A and B, the company is
deadlocked because they have equal shareholdings and
A votes one way and B votes in another, the powers
would not be used to call a meeting and declare that one
member, say A, could validly conduct business in the
absence of B. Such deadlock will, unless it can be sorted
out by the agreement of the shareholders concerned,
generally result in the liquidation of the company.Part 2Business organisations
172
1 transfer of his shares to a purchaser or as a gift;
2 rescission of the contract under a misleading prospectus,
though the more likely and acceptable remedy today
would be to remain a member but receive monetary
compensation;
3 redemption or purchase of shares by the company;
4 death or bankruptcy;
5 winding-up of the company.
Meetings, resolutions and
annual returnShareholders’ meetings
There are two kinds of company general meeting: the
annual general meeting and an extraordinary general
meeting.
Annual general meeting
Section 336 states that an annual general meeting must be
held within six months of a company’s financial year end.
The notice of the meeting must say that it is the
annual general meeting.
Private companies are no longer required to hold
AGMs or table their accounts and reports or appoint
auditors at a company meeting although they may do
so if they choose. Private companies will need to amend
their articles to take advantage of these deregulations, by
removing any relevant restrictions.
Extraordinary general meetings
All general meetings other than the annual general meet-
ing are extraordinary general meetings. They may be
called by the directors at any time.
Section 303 gives holders of not less than one-tenth of
the paid-up share capital on which all calls due have been
paid the right to requisition an extraordinary general
meeting. The requisition must state the objects of the
meeting, be signed by the requisitionists, and deposited
at the registered office of the company. If the directors
do not call a meeting within 21 days of the date of de-
positing the requisition, the requisitionists, or the major-
ity in value of them, may call the meeting within three
months of the date of the deposit of the requisition.
To prevent the directors from convening (i.e. calling)
the meeting to be held on a long distant date so that the
members’ desire to discuss urgent matters is defeated,