ACCA F4 - Corp and Business Law (ENG)

308 20: Company meetings and resolutions  Part F Management, administration and regulation of companies

(c) Copies of written resolutions should be sent to auditors at or before the time they are sent to

shareholders. Auditors do not have the right to object to written resolutions. If the auditors are not

sent a copy, the resolution remains valid; however the directors and secretary will be liable to a

fine. The purpose of this provision is to ensure auditors are kept informed about what is happening

in the company.

There are not too many ways resolutions can be tested. You are most likely to be asked to identify the

rules concerning the three types.

4 Calling a meeting

A meeting cannot make valid and binding decisions until it has been properly convened. Notice of general

meetings must be given 14 days in advance of the meeting. The notice should contain adequate

information about the meeting.

Meetings must be called by a competent person or authority.

A meeting cannot make valid and binding decisions until it has been properly convened according to the

company's articles, though there are also statutory rules.

(a) The meeting must generally be called by the board of directors or other competent person or

authority.

(b) The notice must be issued to members in advance of the meeting so as to give them 14 days 'clear

notice' of the meeting. The members may agree to waive this requirement.

(c) The notice must be sent to every member (or other person) entitled to receive the notice.

(d) The notice must include any information reasonably necessary to enable shareholders to know in

advance what is to be done.

(e) As we saw earlier members may require the directors to call a meeting if:

(i) They hold at least 5% of the voting rights

(ii) They provide a statement of the general business to be conducted and the text of any

proposed resolution

The directors must within 21 days call a meeting to be held no later than 28 days from the date of

the notice they send calling the meeting.

In most cases the notice need not be sent to a member whose only shares do not give them a right to

attend and vote (as is often the position of preference shareholders).

4.1 Electronic communication

We have already seen that notice may be given by means of a website and in electronic form. Also, where

a company gives an electronic address in a notice calling a meeting, any information or document relating

to the meeting may be sent to that address.^

4.2 Timing of notices

Clear notice must be given to members. Notice must be sent to all members entitled to receive it.

Members may – and in small private companies often do – waive the required notice. For short notice to

be effective:

(a) All members of a public company must consent in respect of an AGM.

(b) In respect of a general meeting, members holding 90% of the issued shares of a private company

and 95% of the issued shares of a public company may agree to shorter notice.

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