HLMEX2A

SHAREHOLDER AND COMPANY

MEETINGS
CHAPTER 5

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 HLMEX2A: INTRODUCTION

As an artificial person a company has no physical existence and therefore acts

through its shareholders in general meeting, its directors and/ or its employees.
Exactly who acts is determined by the Act and a company’s own Memorandum of
Incorporation ( MOI).
Certain provisions of the Act are ‘unalterable’ in that a company’s MOI cannot
abolish those provisions.
It is therefore essential to know which of the provisions of the act are alterable
because certain provisions of the Act will apply AUTOMATICALLY unless abolished
or altered by a company’s MOI.
A company’s MOI can also restrict the powers of directors.

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 HLMEX2A: INTRODUCTION

‘shareholder ‘ – section 1 – the holder of a share issued by a

company and who is entered as such in the certified or uncertified
securities register of the company- see page 93.
‘share’ means one of the units into which the propriety interest in a
profit company is divided.
‘shareholders meeting’ – a meeting of those holders of a company’s
issued securities who are entitled to exercise voting rights in relation
to that matter.

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 HLMEX2A: MEETINGS: GENERAL

Before a meeting of shareholders can be held , it has to be properly

called and convened.
A meeting is properly convened if the prescribed notice for convening
the meeting was given by persons who have the relevant authority to
convene a meeting
Notice convening a meeting must be given to all persons who are
entitled to receive notice of the meeting
A meeting must be convened for a time, date and place that is accessible
to the shareholders of the company.
a meeting may commence only if a quorum is present.
A ‘quorum’ is the minimum number of members who have to be present
at the meeting before the meeting can commence.

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 HLMEX2A: RECORD DATE

RECORD DATE
Is the date on which a company determines the identity of its
shareholders and their shareholdings for the purposes of the Act.
It is important because it is the date that determines shareholder
rights- the right to vote and the right to receive a notice of a meeting.
The record date may be set:
1. by the board of directors
2. Or where the board has not set a record date, the latest date by
which the company is required to give shareholders notice of
that meeting; or the date of the action or event.

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 HLMEX2A: CALLING OF A
SHAREHOLDERS MEETING

A SHAREHOLDERS MEETING:
Must be called:
1. at any time that the board is required to convene a meeting and to refer a matter
to decision by the shareholders – eg to elect a director
When a meeting is demanded by the shareholders, provided that the demand is
signed by the holders of at least 10 % of the voting rights entitled to be exercised in
relation to the matter proposed to be considered at the meeting.( page 95 important
i/r/o demand)

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 HLMEX2A

NOTICE OF MEETINGS
Must be in writing
Must include the date, time and the place of the meeting.
Where the company sets a record date for the meeting, the notice convening the
meeting must include the record date
Should explain the general purpose of the meeting and any other specific purposes
Public and non- profit company’s – 15 days business days notice before the date of
the meeting. Other companies notice must be sent 10 business days before the
meeting
A copy of any proposed resolution received by the company , and which is to be
considered at the meeting , must accompany the notice convening the meeting.
Should indicate the % of voting rights required for the resolution to be adopted.

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 HLMEX2A

A notice convening the annual general meeting of a company must

contain a summary of the financial statements that will be tabled at
the meeting
The notice should also explain the procedure that the shareholder can
follow to obtain a full copy of the annual financial statements of the
preceding financial year.
Must contain a prominent statement that a shareholder is entitled to
appoint a proxy to attend , participate in and vote at the meeting in
the place of the shareholder.
Should indicate that the meeting participants will be required to
provide satisfactory proof of identity at the meeting.

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 HLMEX2A:POSTPONEMENT AND
ADJOURNMENT OF MEETINGS

A meeting may be postponed for a week under the following circumstances:

1. within one hour after the appointed time for a meeting to begin, a quorum is not
present
2. When a quorum is not present at the postponed or adjourned meeting, the
members of the company present in person or by proxy will be deemed to constitute
a quorum and
3. If there is other business on the agenda of the meeting, consideration of that
matter may be postponed to a later time in the meeting without motion or vote.

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 HLMEX2A:REPRESENTATION BY PROXY

REPRESENTATION BY PROXY
A proxy is a person who is appointed to represent a
shareholder at a meeting.
The Companies Act 2008 changes the common law and allows a right to appoint
a person to attend, speak and vote on behalf of another.
A person does not have to be a shareholder of a company to be a appointed as
a proxy.
The provisions of the MOI may allow a shareholder to appoint two or more
proxies.
NB: page 98 of textbook and the case of Ingre v Maxwell

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 HLMEX2A

The appointment of a proxy must be in writing and signed by the shareholder

appointing the person.
The appointment remains valid for one year after it was signed.
The shareholder must appoint a proxy for a specific period of time specified in the
proxy appointment form.
A copy of the proxy appointment form must be delivered to the company prior to the
proxy exercising any rights of the shareholder at a shareholder’s meeting.
At the meeting the proxy is entitled to vote as he sees fit, unless the shareholder has
indicated in the proxy appointment form whether the proxy should vote in favour of
or against a particular resolution.

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 HLMEX2A: QUORUM

QUORUM

Unless the company’s MOI states otherwise , a shareholder’s meeting

may not begin until sufficient persons are present at the meeting to
exercise, in aggregate, at least 25% of all the voting rights that are
entitled to be exercised in respect of at least one matter to be decided
at the meeting.

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 HLMEX2A:ANNUAL GENERAL MEETING

The first annual general meeting of a PUBLIC company must occur no more than
18 months after incorporation.
Subsequent annual general meetings must occur no more than 15 months after
the previous annual general meeting.
The AGM must discuss:
1. The director’s report, the audited financial statements for the immediately
preceding financial year and the audit committee;
2. election of directors
3. Appointment of an auditor and audit committee;
4. And any other matters raised by shareholders

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 HLMEX2A:DECISIONS OF SHAREHOLDERS AND
OTHERS

Two types of resolutions may be taken by shareholders:

1. ORDINARY RESOLUTION: adopted with the support of more
than 50 % ( or as specified in the MOI0of the voting rights
exercised at a quorate meeting on the resolution, EXCEPT that
a resolution for the REMOVAL OF A DIRECTOR cannot require
more than 51% for such a resolution.
2. SPECIAL RESOLUTION :adopted with the support of at least
75% ( or as specified in the MOI) of the voting rights exercised
at a quorate meeting on the resolution
THERE MUST BE AT LEAST 10 % POINTS BETWEEN THE
REQUIREMENTS FOR ADOPTION OF AN ORDINARY RESOLUTION
AND THOSE FOR A SPECIAL RESOLUTION.

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 HLMEX2A

SPECIAL RESOLUTION

REQUIRED when:
1. Amending the company’s MOI
2. Approving the voluntary winding-up of a company
3. Approving the sale of assets, a merger, an amalgamation or a scheme of
arrangement.
4. Approving director’s remuneration
5. Otherwise required by the MOI

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 HLMEX2A:PROPOSAL OF RESOLUTIONS

Resolutions must be proposed by either the board of directors or one or more

shareholders.
A proposed resolution must be expressed with sufficient clarity and specificity and
must be accompanied by sufficient information to enable a shareholder who is
entitled to vote on the resolution to determine whether to participate in the meeting
And to seek to influence the outcome of the vote on the resolution.
Where the proposed resolution is not clear application can be made by a director or
shareholder to court for an order restraining the company from putting the proposed
resolution to vote until the defect is remedied.
Once a resolution as been adopted it may not be challenged that it was not clear.

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