1 Shareholders and Company Meeting
1.1 Introduction
Shareholder:
Term used only in respect of a profit company.
Person who is entitled to exercise any voting rights in relation to a company,
irrespective of the form, title or nature of the securities to which those voting rights are
attached.
Retain control over the directors by their power to appoint and remove directors
Approve important decisions of the directors
Member:
Term used for non-profit companies who do not have shareholders
Directors:
Have authority to exercise all powers and perform any of functions of the company,
except to extent that Act or company’s Memorandum of Incorporation provides
otherwise
Have a duty to manage the company
1.2 Notice of Meetings
Notice must:
be in writing
include date, time and place for the meeting
explain general purpose of the meeting;
contain a statement that a shareholder is entitled to appoint a proxy to attend,
participate in and vote at the meeting in the place of a shareholder
should indicate the participants will be required to provide proof of identity at the
meeting
be accompanied by a copy of any proposed resolution which will be considered at the
meeting
indicate percentage of voting rights required for the resolution to be adopted
Notice before date of meeting:
Public company & non-profit company with voting members: 15 business days
Any other company: 10 business days
MOI may prescribe longer minimum notice
Notice convening AGM:
must contain summary of the financial statements
must explain procedure shareholder can follow to obtain complete financial
statements
Defective notice:
Meeting may proceed if:
Persons who are entitled to vote i.r.o. each item on agenda:
are present
acknowledge actual receipt of notice
agree to waive notice of meeting / ratify defective notice
Where defect relates to one/more matters on the agenda:
matter may be taken off agenda; notice remains valid w.r.t. remaining matters
where defective notice ratified: meeting may consider matter
1.3 Representation by Proxy
Getz v Spaarwater: Validity or otherwise of proxy must depends on facts of each case.
Material departure from prescribed form may invalidate proxy. Here: only date of execution
on form left blank and this non-compliance was judged to not be of a material nature.
, Company Law (LML4806)
Davey and others v Inyaminga Petroleum: cf. Getz. Prescribed form required proxy giver
to set out number of shares i.r.o. which he was authorizing proxy to vote. Non-compliance
was judged to be of a material nature and proxy was thus incomplete and invalid.
Ingre v Maxwell: Must be at least 2 persons present to constitute a meeting; not valid
where 1 person holds all proxies of all persons who were entitled to attend meeting.
The appointment of a proxy:
in writing and signed by shareholder;
valid for one year;
may be for a specific period of time;
may be for two or more persons concurrently exercising voting rights for different
shares;
proxy may delegate authority to act on behalf of the shareholder to another person;
copy of the proxy appointment form must be delivered to the company before the
shareholders’ meeting;
shareholder is not compelled to make an irrevocable proxy appointment;
shareholder may alter proxy by cancelling it in writing, appointing another proxy and
deliver a copy of the revocation to the proxy and the company.
appointment remains valid until end of meeting for which it was intended to be used.
Proxy is entitled to vote as he/she sees fit, unless shareholder indicated on proxy form
how proxy should vote.
1.4 Demand to convene a shareholders’ meeting
Board of company/any other person specified in MOI may call a shareholders’ meeting at
any time.
Meeting must be convened:
at any time required by the CA or MOI, i.e. to elect a director
if one/more written and signed demands for such a meeting are delivered to the
company.
Relevant points when demand is made:
demand must specify purpose of meeting
demand must be signed by holders of at least 10% of voting rights
MOI may specify a lower percentage than 10%
Company/shareholder may apply for order setting aside demand for meeting on
following grounds:
Vexatious
Frivolous
Matter has already been considered and decided upon by shareholders
Demand may be withdrawn before start of meeting.
1.5 Shareholders acting other than at a meeting
Gohlke and Schneider v Westies Minerale: members may validly appoint a director to the
board without any formal meeting being held because there was evidence of their
unanimous consent.
In re Duomatic Ltd: unanimous approval of directors’ remuneration by the two directors
holding all the voting shares in a company could be regarded as a resolution of a general
meeting approving the payment.
CA: Resolution may be submitted to shareholders and, if adopted in writing by the
required majority, will have the same effect as if it had been adopted at a meeting without
actually holding a general meeting of shareholders (s 60).
1.6 Annual General Meeting
1st AGM must occur no more than 18 months after company’s date of incorporation.
Subsequent AGMs must occur no more than 15 months after the previous AGM.
Section 61(8): following matters must be transacted at the AGM:
Election of directors to the extent required by the Act or the company’s MOI;
Appointment of an auditor for the following financial year;
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