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Summary Company procedure planning procedure - BLP notes
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Company procedure planning procedure - BLP notes
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COMPANY PROCEDURE PLANNING PROCEDURE -BOARD MEETING PROCEDURE - Step 1
Always see the SPECIAL ARTICLES to see if that applies and not the MODEL
ARTICLES/COMPANIES ACT
Issue MA or CA06 section Summary Apply to facts
Notice Board Meeting will be called on notice MA 9: Board Meeting will be
called on notice
Explain how to CA is silent on board meeting procedure. Any director can call a
give notice of the directors meeting by Any director of X company
BM, or confirm Model Article 9 – Calling a directors giving notice of the (name of directors who can
why appropriate meeting meeting to all the call a board meeting) can
notice has already directors or by call a board meeting by
been given. (1) Any director may call a directors’ authorising the giving reasonable notice
meeting by giving notice of the meeting to company secretary to (Re Homer) to all the
the give notice MA9(1) directors or by authorising
directors or by authorising the company the company secretary to
secretary (if any) to give such notice. Notice of the board give notice under MA 9(1)
meeting must be given and
(2) Notice of any directors’ meeting must – notice must state the
indicate— date and time MA9(a) 1. When a board meeting
and the place of the has already been called:
(a) its proposed date and time; meeting MA9(b). If a [Name has called a board
director cannot attend meeting] OR
(b) where it is to take place; and i.e. be at the proposed [Name - director/secretary]
place, then need to has given reasonable
(c) if it is anticipated that directors note how the directors notice to the other directors
participating in the meeting will not be in the will communicate of board meeting on [date].
same place, how it is proposed that they during the meeting This complies with MA9(1)
should communicate with each other during MA9(c)
the meeting. How much notice a director
Also notice must be must receive is stated in
(3) Notice of a directors’ meeting must be given to each director – Re Homer.
given to each director, but need not be in doesn’t need to be in This notice is reasonable
writing. writing MA9(3) because ... X days of
notice has been given and
(4) Notice of a directors’ meeting need not Re Homer – this is reasonable OR few
be given to directors who waive their reasonable notice of house are reasonable as
entitlement to notice of that meeting, by the meeting i.e. 5 all the directors work in the
giving notice to that effect to the company minutes or longer. same building.
not more than 7 days after the date on
which the meeting is held. Where such 2. Advise on how a board
notice is given after the meeting has been meeting can be called:
held, that does not affect the validity of the
meeting, or of any business conducted at it. [Names (directors) have to
call a board meeting or
MA 9 – does not say how much notice the Name (company secretary)
directors must receive. as per MA9(1)
Re Homer – any director can call a board The notice needs to state
meeting by “REASONABLE” notice to all the date and time MA9(2)
the other directors. How much notice is (a) and the place of the
reasonable – depends on the meeting MA9(2)(b). If a
, circumstances. Can be as little as 5 minutes director cannot attend i.e.
if the board meeting is not controversial and be at the proposed place,
all the directors are round. In other then need to note how the
instances, longer notice would be needed directors will communicate
for it to be reasonable. during the meeting MA9(2)
(c)
Also notice must be given
to each director – doesn’t
need to be in writing
MA9(3)
Reasonable notice must be
given to all the directors as
stated in Re Homer
[Reasonable notice in this
case will be .. because ....]
Quorum and Quorum Quorum Quorum
Directors For a board meeting to be
Interests For a board meeting to be validly conducted MA 11: valid, a quorum of [number]
– a quorum must participate i.e. a minimum directors are needed as per
Explain the number of directors must participate in the 2 directors must MA11(2) [Number and
quorum required board meeting. participate in the board names of] directors will be /
for a valid BM and meeting MA11(2) are present / attending / will
who should attend, Model Article 11 - Quorum for directors’ participate at BM, so the
including: meetings meeting is quorate.
If the total number of
Identify any (1) At a directors’ meeting, unless a quorum directors in the Note: Does special articles
interests held is participating, no proposal is to be voted company is les then 2 change the quorum?
by directors. on, directors then no
Explain except a proposal to call another meeting. decision can be made If total number of directors
whether any except from appointing is less than the quorum
declaration of (2) The quorum for directors’ meetings may more directors required, then directors
interest is be fixed from time to time by a decision of MA11(3)(a) or call a cannot take any decision
required under the directors, but it must never be less than general meeting to other than appointing new
s177 CA. two, and unless otherwise fixed it is two. allow shareholders to directors and/or call GM for
Explain any appoint more directors shareholders to appoint
impact on the (3) If the total number of directors for the MA11(3)(b) further directors.
quorum and time being is less than the quorum required,
voting arising the Is there any
from the directors must not take any decision other reason why a director
interest. than a decision— might be unable to attend?
If a director does not want
(a) to appoint further directors, and/or a decision to go through -
How will that impact on the
(b) to call a general meeting so as to enable resolution passing? Will
the shareholders to appoint further there still be a quorum
directors. without him?
Conflict of Interest Conflict of Interest
Model Article 14 – Conflict of Interest Model Article 14 – if MA14 - If director has
the director has an personal interest in
(1) If a proposed decision of the directors is interest in the proposed transaction – director
concerned with an actual or proposed transaction / resolution cannot be counted/form
transaction or arrangement with the then they cannot form part of the quorum unless
company in which a director is interested, part of the quorum. exceptions in MA14(3) and
that director is not to be counted as (4) apply
, participating in the decision-making process Check – has MA14
for quorum or voting purposes. been disapplied by
special article
(2) But if paragraph (3) applies, a director
who is interested in an actual or proposed
transaction or arrangement with the
company is to be counted as participating in
the decision-making process for quorum
and voting purposes.
(3) This paragraph applies when—
(a) the company by ordinary resolution
disapplies the provision of the articles which
would otherwise prevent a director from
being counted as participating in the
decision-making process;
(b) the director’s interest cannot reasonably
be regarded as likely to give rise to a
conflict of interest; or
(c) the director’s conflict of interest arises
from a permitted cause.
(4) For the purposes of this article, the
following are permitted causes—
(a) a guarantee given, or to be given, by or
to a director in respect of an obligation
incurred by or on behalf of the company or
any of its subsidiaries;
(b) subscription, or an agreement to
subscribe, for shares or other securities of
the company or any of its subsidiaries, or to
underwrite, sub-underwrite, or guarantee
subscription for any such shares or
securities; and
(c) arrangements pursuant to which
benefits are made available to employees
and directors or former employees and
directors of the company or any of its
subsidiaries which do not provide special
benefits for directors or former directors.
Directors Interests Directors Interests
Do any director have any personal Directors Interests
interests? If yes then need to declare. But s.177(1) - If director is 1. No directors] have an
see exceptions in (6) = no duty to declare, interested in a interest in proposed
but best practice is to declare it. proposed transaction, transactions / arrangement
he must disclose his to which the company is a
S177 CA - Duty to declare interest in interest to the board party. [There is no impact
proposed transaction or arrangement on quorum or voting.]
s.177(6) - Exceptions
(1)If a director of a company is in any way, to requirement to 2. [[Name of director] has
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