The Companies Act has completely overhauled the rules covering general meetings of private companies.
Private companies are not obliged to hold AGMs.
This applies unless the company’s articles require one. A company that does not hold an AGM must send its accounts to the shareholders and the auditors (if any) are automatically re-appointed. Shareholders have the power to demand that a meeting is called. These rules do not apply to plcs, which must still call AGMs.
The minimum full period of notice for all meetings is 14 days.
This includes an AGM, if the company holds one, and applies even if a special resolution is proposed. However the company’s existing articles may require a longer notice period. The minimum notice for a plc’s AGM is still 21 days. If the meeting is to be called on short notice, the required majority is reduced from 95% to 90% (subject to the articles)
A proxy may now vote on a show of hands, and a shareholder may split his or her shareholding to appoint more than one proxy.
There are also changes to the rules about appointing and removing proxies, and new rules about company invitations to appoint proxies. As a result of the changes, a more detailed statement about proxies must be included in the notice calling the meeting.
The rules about the appointment of a chairman at a meeting have changed.
These may affect the chair’s casting vote. Great care must be taken on drafting new articles on this point.
This is a brief summary of some of the changes. The company commercial team at Hay & Kilner will be happy to assist with any queries you may have. Contact Nick James, Jonathan Waters, Mark Adams or Jim Lowe.
This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.