ACCA F4 - Corp and Business Law (ENG)

Part F Management, administration and regulation of companies  20: Company meetings and resolutions 311

A meeting can only reach binding decisions if:

 It has been properly convened by notice.

 A quorum is present.

 A chairman presides.

 The business is properly transacted and resolutions are put to the vote.

There is no obligation to allow a member to be present if their shares do not carry the right to attend and

vote. However full general meetings and class meetings can be held when shareholders not entitled to

vote are present.

Each item of business comprised in the notice should be taken separately, discussed and put to the vote.

Members may propose amendments to any resolutions proposed. The chairman should reject any

amendment which is outside the limits set by the notice convening the meeting.

If the relevant business is an ordinary resolution it may be possible to amend the resolution's wording so

as to reduce its effect to something less (provided that the change does not entirely alter its character).

For example an ordinary resolution authorising the directors to borrow £100,000 might be amended to

substitute a limit of £50,000 (but not to increase it to £150,000 as £100,000 would have been stated in the

notice).

5.2 The Chair (chairman)

The meeting should usually be chaired by the chairman of the board of directors. They do not necessarily

have a casting vote.

The articles usually provide that the Chair (chairman) of the board of directors is to preside at general

meetings; in their absence another director chosen by the directors shall preside instead. As a last resort a

member chosen by the members present can preside.

The chairman derives their authority from the articles and they have no casting vote unless the articles

give them one. Their duties are to maintain order and to deal with the agenda in a methodical way so

that the business of the meeting may be properly transacted.

The chairman:

 May dissolve or adjourn the meeting if it has become disorderly or if the members present agree.

 Must adjourn if the meeting instructs them to do so.

5.3 Quorum

The quorum for meetings may be two or more (except for single member private companies). Proxies can

attend, speak and vote on behalf of members.

A quorum is the minimum number of persons required to be present at a particular type of (company)

meeting. In the case of shareholders' meetings, the figure is usually two, in person or by proxy, but the

articles may make other provisions.

There is a legal principle that a 'meeting means a coming together of more than one person'. Hence it

follows that as a matter of law one person generally cannot be a meeting.

The rule that at least two persons must be present to constitute a 'meeting' does not require that both

persons must be members. Every member has a statutory right to appoint a proxy to attend as their

representative.

Key term

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