ACCA F4 - Corp and Business Law (ENG)

304 20: Company meetings and resolutions  Part F Management, administration and regulation of companies

Study guide

Intellectual level

F Management, administration and regulation of companies^

3 Company meetings and resolutions

(a) Distinguish between types of meetings: ordinary general meetings and

annual general meetings

1

(b) Distinguish between types of resolutions: ordinary, special and written 2

(c) Explain the procedure for calling and conducting company meetings 2

Exam guide

For the exam you must be quite clear about the different types of resolution, when each type is used, and

the percentage vote needed for each type to be passed. This topic lends itself to multiple choice questions.

However, resolutions in particular are important in many areas of the corporate part of the syllabus and

meetings of members are an important control on the acts of the directors. Therefore, this topic could

easily be incorporated into a scenario question.

1 The importance of meetings

Although the management of a company is in the hands of the directors, the decisions which affect the

existence of the company, its structure and scope are reserved to the members in general meeting.

The decision of a general meeting is only valid and binding if the meeting is properly convened by notice

and if the business of the meeting is fairly and properly conducted. Most of the rules on company

meetings are concerned with the issue of notices and the casting of votes at meetings to carry resolutions

of specified types.

1.1 Control over directors

The members in general meeting can exercise control over the directors, though only to a limited extent.

(a) Under normal procedure one third of the directors retire at each annual general meeting though

they may offer themselves for re-election.

(b) Member approval in general meeting is required if the directors wish to:

(i) Exceed their delegated power or to use it for other than its given purpose

(ii) Allot shares (unless private company with one class of shares)

(iii) Make a substantial contract of sale or purchase with a director

(iv) Grant a director a long-service agreement

(c) The appointment and removal of auditors is normally done in general meeting.

1.2 Resolution of differences

In addition, general meetings are the means by which members resolve differences between themselves

by voting on resolutions.

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