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Company Procedures Question
(References to sections are of the Companies Act 2006 (hereafter CA) unless otherwise stated)
Whose decision is it? + Purpose of meeting
“The general rule is that directors can take all decisions unless the Articles of Association of the *company*, in
this case the Model Articles (hereafter MA) apply, or the CA provide otherwise (Article 3 MA).”
Here, shareholders’ resolutions is required because it involves:
Changing the company’s articles (SR) – s21(1)
Approving a substantial property transaction (OR) – s190(1)
Approving a director’s service contract for a fixed term over 2 years (OR) – s188(2)
Authorizing directors to allot shares (OR) – s551(1)
Disapplying shareholders’ pre-emption rights (SR) – s569(1), 570(1), 571(1)
Removing a director against their will (OR) – s168(1) / (auditor – s510(2))
Changing the company’s name (SR) – s77(1)
Approving compensation to a director for loss of office (OR) – s217(1)
Approving a contract to buy back the company’s shares (OR) – s694(2)
Approving payment to buy back the company’s shares out of capital (SR) – s716(1)
Ratifying a director’s breach of duty (OR) – s239(2)
Authorizing political donations (OR) – s366(1)
Deciding to register the company as a public company (SR) – s97(1)(a)
What meetings will need to be held? What notices need to be given and by whom? What are the quorum
requirements? – SH Resolution
“This can be passed by the shareholders either at a general meeting or by a written resolution (s281).”
(How is it suggested in the facts that it should be passed? If nothing said, choose a written resolution, unless
removal of director (s168(1), s288(2))
Written Resolution by shareholders (s288(2))
“Can be proposed by either the directors (s291) or the shareholders (s292-295).”
By directors:
“Firstly, a directors’ meeting will need to be held at which they will decide by simple majority to propose that the
shareholders pass a written resolution. Any director can convene a board meeting (Art 9(1) MA) by giving
reasonable notice, complying with the requirements in article 9(2) MA. A notice of 14 clear days must be given
(s307(1), 360). There must be a quorum of at least two directors (Art 11(2)). At the meeting, the directors must
produce and approve the written resolution, and a copy will be sent to every eligible member and auditors. The
meeting will be adjourned until the shareholders decide and resumed following the passing of the resolution by
the shareholders.”
By shareholders:
If it is likely that the directors will refuse to circulate a proposed shareholders’ written resolution, shareholders
holding 5% or more of the total voting rights have the right to require directors to do so (s292). Directors have 21
days to comply (s293(3)) or else shareholders can circulate the resolution themselves.
[General Meeting (s301)
Can be proposed by either the directors (s302) or the shareholders (s305(1)).
By directors:
Firstly, a directors’ meeting will need to be held at which they will decide by simple majority to propose that the
shareholders hold a general meeting.
By shareholders:
Must first make a request requiring the directors to call the GM (s303).
Directors have 21 days to comply (s304(1)) or else shareholders can circulate the resolution themselves (s305).
A notice of 14 clear days must be given (s307(1), 360) to the shareholders and comply with s311. There must
be a quorum of at least two qualifying persons (shareholders) (s318).]
Directors’ interest – LG15
, A director is required to declare their interest to the proposed transaction in writing or at the board meeting
(s177). As Art 14 MA is disapplied by the Company’s articles of association, the director can vote and count in
the quorum of the meeting.
What type of resolution is required?
Ordinary resolution will be used because nothing suggests that a higher majority is required (s281(3)).
Special resolution will be used as required by CA or article …
Voting procedures
OR Written Resolution: Simple majority (s282(2))
- Eligible members have one vote per share (284(1)(a))
OR General Meeting: Simple majority (s282(3), (4)).
- On a show of hands, each member has one vote (s284(2))
- On a poll, each member has one vote per share (s284(3)(a))
SR Written Resolution: 75% (s283(2))
- Eligible members have one vote per share (284(1)(a))
SR General Meeting: 75% (s283(4), (5))
- On a show of hands, each member has one vote (s284(2)
- On a poll, each member has one vote per share (s284(3)(a)
Eligible members = those who were entitled to vote the date the resolution was sent to members (s289,290)
Poll can be demanded by chair, directors, two persons entitled to vote, person with more that 10% voting
rights (s321)
Chair has a casting vote (Art 13(1))
[Conclusion]
What documents are required?
WR proposed by directors
Minutes of a directors’ meeting (s248)
The written resolution
Copy of resolution for Companies House
Shareholders’ General Meetings
Minutes of directors’ meeting
Notice of the general meeting
Consent to short notice (if needed)
Minutes of the general meeting
Copies of resolutions for Companies House filing
Post-completion filing and requirements
Sent to CH:
Special Resolutions need to be filed at Companies House within 15 days (s29, 30)
Ordinary Resolutions to give directors authority to allot new shares (s551(9))
Must keep:
Board minutes for at least ten years (Art 15, s248(1))
Minutes of all proceedings of general meetings and records of shareholders’ written resolutions (s355)
Records of decisions of sole members (s357)
Keep at company’s registered office minutes of the directors’ meeting (s248CA 2006) for at least 10 years –
always! Don’t send to CH, they are highly confidential.
Forms: page 183 Manual
Form AP01: appointment of director – within 14 days (s167)
Form NM01: change of name by special resolution (s78)
Form NM04: change of name by articles (s79)
Form SH01: allotment of shares – within 1 month (s555)
Form TM01: termination of appointment of director – within 14 days (s167)
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