INTRODUCTION If the notice is posted:
s.1147 If the notice is posted, it is deemed to have been received by the
Always check in your question whether the company you are advising recipient 48 hours after it was posted. This 48 hours only includes
has incorporated the model articles. If not, you may not be able to cite working days.
Model articles in your answer and you will then need to refer to what s.1173 Working day = not weekend/bank holiday.
the actual articles set out.
Shorter notice:
s.307(5) GM may be held by shorter notice if agreed by:
BOARD MEETINGS: ∑ A majority in number of the members who have a right to
attend and vote the GM
Who calls? AND
Model Article 9(1) Called by any director ∑ This majority must together hold not less than the requisite
percentage in nominal value of the shares.
Notice period?
Browne v La Trinidad Board meetings can be called by any director s.307(6) Requisite percentage for private companies = 90% or if the
giving reasonable notice. articles set out a higher percentage, than that percentage as specified.
Always calculate if the shareholders have the requisite percentage if
Quorum? they agree on a shorter notice together.
MA 11(2) The quorum may be fixed from time to time by the directors
but must never be less than 2 and unless otherwise fixed, it is 2.
FULL NOTICE PROCEDURE:
Decision-making?
Decisions at BM are made by board resolutions passed either: Our standard procedure plan. In that case, we must give 14 days notice
∑ MA 7(1) On a simple majority OR for the GM which is the full notice.
∑ MA 8 By unanimity You can use this procedure for all types of procedure plans.
Simple majority = more than 50% Structure:
Count 1 vote per director unless that director abstains. * Board Meeting I
MA 7(2) If only one director - he can take decisions on his own * General Meeting
* Board Meeting II
Casting vote? * PMMs
A chairman may have a casting vote – check in the articles if this is the
case in your scenario as casting vote may be removed.
MA 13 The chairman may use his casting vote if there is a deadlock. SHORT NOTICE PROCEDURE:
What if someone abstains? Structure:
If a director abstains from voting on a decision, he will not be counted 1. ADJOURN BM
towards the number of people voting on that issue. 2. GM
Eg. on a board with 6 directors, if 1 abstains, count the votes out of 5. To 3. RECONVENE BM (if consent for short notice is obtained)
get a majority, you would thus need 3 out of 5 voting in favour. 4. PMMs
Board Meeting I:
GENERAL MEETINGS: * Quorum: All the directors should attend since the consent of all
directors is needed to call the GM on short notice.
General meetings (GMs) are called to:
1. make decisions that require Ordinary resolution (OR) * Agenda:
AND/OR ◊ Approve the form of notice of GM and here, also approve
2. make decisions that require Special resolution (SR) any consent of short notice.
s.307(4)-(6) If approval is obtained, the full notice period can
Ordinary resolution = Simple majority, so more than 50% be reduced. There are two elements to the consent required
Special resolution = 75% or more. for short notice and these are that approval must given by:
◊ the majority in number of the members of the company
How do you tell which decisions require OR or SR? (so that, out of 6 shareholders, a minimum of 4 must
You must look at CA 2006 or the Articles to find what the shareholders consent); who
will be deciding on and these will set out if OR or SR is required. ◊ together hold at least 90% in nominal value of the issued
shares of the company.
Quorum?
s.318(2) CA 2006 The quorum is 2. * Adjourn Board Meeting.
s.318(1) CA 2006 If the company has only 1 member, 1 qualifying person
present is sufficient. General Meeting
Board Meeting I (Same BM Reconvened):
Decision-making? Could take place as soon as convenient afterwards.
Decisions are made on a show of hands unless a poll is demanded under
MA 42. – if you have 2 shareholders with a large shareholding, he is likely Post Meeting Matters:
to demand voting by poll as this is more beneficial for them. One Short notice procedures requires changes to documentation:
shareholder is not enough to demand a poll unless he is also a director. Board meeting minutes only for one BM, instead of two
s.307(4) Additional document: consent to short notice document is
Show of hands: each shareholder present at the meeting will be entitled required which must be file at Companies House.
to 1 vote, regardless of the number of shares held by that shareholder.
Poll: every shareholder has one vote in respect of each share.
MA 44(1) A poll can be demanded before the meeting or at the meeting
WRITTEN RESOLUTION PROCEDURE:
either before or immediately after a show of hands has taken place. s.281 Only private companies may pass a shareholders’ resolution by
MA 44(2) The chairman, the directors, 2 or more shareholders, or any way of a written resolution.
member with not less than 10% of the voting rights of those entitled to
vote on the resolution can demand one. Structure:
1. ADJOURN BM
NOTICE OF GMS – COUNTING TIME: 2. WRITTEN RESOLUTION (instead of GM)
3. RECONVENE BM
s.307(1) For a private company: call GM on 14 clear days’ notice. 4. PMMs
s.360(1)-(2) This notice excludes the day on which notice is given and
the day of the meeting. – the 14 days must be ‘clear’ days.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
I I
Day of 14 clear days Day of
Notice GM
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, Board Meeting I: I
The only overlap here is the full notice procedure so this is what you
* Agenda: should be using.
◊ Hold board resolutions to:
◊ s.288(3)(a) Propose a written resolution. As you will be able to use notes in the exam, it will be easier to merge
◊ Approve the form of written resolution, including the two plans. Take each of your plan and start crossing out anything that is
following: irrelevant based on your question.
◊ s.283(3)(a) If it is a Special Resolution, it must be
designated as such Then start building your plan from the beginning, by looking at Board
◊ ss.291(4)(a) and s.296-297 The resolution must meeting I and going through all the requirements. Who calls, Notice and
include instructions to the shareholders as to how to Quorum will stay the same. The only thing that will change is the agenda
vote and identify the lapse date for BM 1-2 and the GM and the PMMs.
◊ The written resolution (WRS) should be circulated to all In the agenda, list all the agenda items for issuing/allotting shares first,
eligible members immediately. then removing directors for all meetings (same for BM 1-2 and the GM).
s.291(3)(a) The directors must send a copy of the WRS to all It does not matter the order in which you do this, but in order to avoid
members confusion, it is better to add the agenda items in order. Anything that is
s.296(1) If there is a company representative: they can the same for both plans should not be duplicated.
indicate agreement to the resolution by signing a copy of the
draft WRS.
s.297 Time limits for WRS
* Voting:
s.282(2) Written OR: 50% or more of those entitled to vote
s.283(2)-(3) Written SR: min. 75% of those entitled to vote.
A written special resolution must state it is a special resolution
and eligible members must sign, date and return the WRS. All
votes on WRS are on a poll.
The board meeting will then adjourn for the written resolution to be
signed this could be signed straightaway.
General Meeting (Written resolution instead)
Board Meeting I (Same BM Reconvened):
* Agenda:
◊ s.296(4) To report that the special resolution has been
passed.
Post Meeting Matters:
WRS changes to documentation:
Board meeting minutes only x1
s.355(1)(a) and (2) Additional doc: keep a record of the WRS
HOW TO TELL WHICH TYPE OF NOTICE TO USE?
Underneath each type of procedure plan, I have listed the procedures
you can use. There are rules around using certain procedures for
achieving certain types of outcomes. – eg. You are not allowed to use a
written resolution procedure for issuing shares.
If you see that the procedure has been crossed out from underneath the
heading, that means that type of procedure can never be used.
The full notice procedure can always be used, however it takes a long
time which is disadvantageous to the company. – So before considering
the full notice procedure, always see if there is a way for you to use the
written procedure or the short notice procedure.
Procedures from best to least convenient:
1. Written resolution procedure
2. Short notice procedure
3. Full notice procedure
Problem with the written resolution procedure:
◊ The rules do not allow for a written resolution procedure in
many cases
◊ Not available for public companies
Problem with the short notice procedure:
All directors must vote in favour of the short notice procedure. If even
one of them is likely to vote against it, consider the full notice procedure
instead.
MERGING TWO PLANS INTO ONE:
While this is unlikely, you may get a question where two types of plans
will need to be merged into one.
Example:
If your question instructs you to remove a director and also issue/allot
shares at the same time, you will need to merge the two plans.
You need to first look at what type of procedure to use and there must
be a type of procedure that overlaps both, and this is usually the full
notice procedure which is available for all plans.
For Removing a director: you can only use the full notice procedure.
For Issuing/allotting shares: you can use either the full notice procedure
or the short notice procedure.
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