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CHAPTER: COMPANY MEETINGS
After the completion of this chapter, you should be
able to:
➢Explain the various types of meetings
➢Discuss the requirements of notice of meetings, and
the importance of giving sufficient notice to the
members
➢Discuss the proceedings of meetings including the
venue, the quorum, the appointment of proxy and the
voting process
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OVERVIEW
➢A public company is required to hold at least one general meeting
of members in every calendar year. Though private companies are
no longer required to hold its annual general meeting, there are
occasions when it is required to hold a meeting. For example,
approval or ratification for the use of the company’s property by a
director or officer of the company (section 218), a substantial value
transaction involving a director or substantial shareholder or any
person connected with them (section 228(1)) or the removal of an
auditor (Section 276)).
➢Due to the importance of these company meetings, the CA 2016
has prescribed matters pertaining to meetings. (Section 290 to
344).
➢The CA 2016 also provides that a private company need not hold
a general meeting to pass a resolution but may do so by circulation.
(Section 297 to 308).
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WHAT IS A MEETING?
A meeting is a gathering of two or more persons. The
court in Sharp v Dawes (1876) said the term ‘meeting’
means a coming tighter of more than one person. So, a
meeting should constitute at least two persons.
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TYPES OF COMPANY MEETINGS
1) Annual General Meeting (AGM)
➢Section 340 provides that only a public company is required to hold an
AGM. It does not provide for a private company; instead the CA 2016 says
that a private company’s audited accounts will be circulated to its members
within six months from the end of its financial year (section 258. Its director
(section 202) and an auditor (section 267) may be appointed by members
passing written resolutions without the need for a meeting.
➢Thus an AGM is only applies to a public company.
➢The business of the AGM is to receive and consider the financial report,
directors’ report and auditor’s report.
➢If a company is not being able to hold its AGM within the prescribed time
due to any special reason, the company may apply to the ROC for an
extension of time (section 340(4)).
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2) Extraordinary General Meeting (EGM)
➢It must be emphasized that an EGM applies
to both public as well as private companies.
➢An EGM is usually called on short
notice and deals with an urgent matter.
➢The directors may call general meetings
when they wish to do so.
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Powers of directors to convene meeting
➢It is the Board that convenes the members’ meeting
(section 310(a)). It does so by passing a directors’
resolution. The company secretary will then prepare the
meeting requirements and send notices to the members.
➢If one of the items on the agenda is the passing of a
special resolution, at least 21 days’ notice must be given
to all the members. If no special resolution is proposed,
14 days’ notice suffices. However, the company’s
constitution may provide for a longer notice.
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By court order
➢There are occasions whereby a particular director would like to
call for an EGM to discuss an urgent matter but his intention is
not shared by other directors. He may then apply to the court
under section 314 to call for an EGM.
➢Section 314 applies when it is impracticable or impossible to
convene an EGM as prescribed by the company’s constitution.
➢In Re El Sombrero (1958), there were 3 shareholders.
Shareholders A and B held 5% of the issued capital each and the
balance of 90% of the issued share capital was held by
shareholder C. Shareholder A and B frustrated C’s attempts to call
for a meeting by not attending. Shareholder C applied to the
court for a meeting.
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NOTICE OF MEETINGS
During the meeting, members are given the opportunity to query
the directors on the operation of the company. Thus, it is
important that members are given sufficient notice of the
meeting.
To whom?
Section 321(1) provides that notice of a company meeting must
be given to “every member, director and auditor of the
company”.
Written notice must be given individually to each member
entitled to vote at the meeting and to each director (section
321(1) and auditor (section 321(1).
Section 316(6) said the meeting if the omission to give the notice
is accidental. There are two cases to illustrate what may
tantamount to accidental omission.
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In Musselwhite v Musselwhite (1962), some members had
executed transfer of their shares in favour of third parties but the
shares had yet to be transferred. Though their names remained in
the register of members, the company did not give them notice of
a meeting, under the impression that they were not entitled to
receive the notice. The court held that this was an intention
omission and thus, the meeting was held to be void.
However in Re West Canadian Collieries Ltd (1962), the failure to
give notice of a meeting to nine members was due to an
administrative error. The court held that ut was an accidental
omission and thus, the omission does not invalidate the meeting.
Section 319(1) provides that the notice of meeting of members
shall be in writing. It can be in hardcopy or in electronic form.
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Period
The number of days required to be given to the members’
depends on whether it is the company’s AGM and the
matters being put to vote.
What is the effect then if insufficient notice is given to the
members? Section 582 applies.
The number of days given depends on the type of meeting
and resolution proposed:
MEETING
RESOLUTION
MINIMUM NOTICE
AGM
21 DAYS
EGM
14 DAYS
SPECIAL
21 DAYS
ORDINARY
14 DAYS
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PROCEEDINGS AT MEETING
Due to the importance of meeting, the general proceedings at the
members’ meeting are prescribed in section 327 to 333 of the CA 2016.
Venue
Section 327(1) prescribe that a company may hold the meeting at more
than one venue, using technology or method that allows members a
reasonable opportunity to participate and to exercise their right to
speak and vote at the meeting.
It is not necessary for the main venue to be at the company’s
registered office or place of business.
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Quorum
Section 328(2) said that there must be at least two members
[personally present at a, meeting unless a higher number is specified in
the constitution.
Proxy
A proxy is someone who attends a general meeting and votes in place
of a member of the company. Every member of a company has a
statutory right to appoint a proxy.
A person who is member of a company always has the right to appoint a
person as the member’s proxy to attend and vote at the meeting.
Section 334(1) provides that every member who is entitled to attend
the meeting has the statutory right to appoint a proxy.
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MEMBERS VOTING
✓Normally in meetings, members will be asked to vote on
resolutions put before the meeting for its consideration.
The voting could be either be done by way of a show of
hands (section 330(1) or by poll (section 293(1)(a)(iii)).
✓If a company adopts Table A, then Articles 51 provides
that a resolution put to the vote at the general meeting
must be decided on a show of hands unless a poll is
demanded.
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Resolutions and Voting
➢There are two types of resolutions; ordinary and special resolution. Special resolution is
required for more important matters like amendments to the company’s constitutional
documents or resolutions to reduce the capital of the company or to wind up the company
➢A special resolution must be passed by a ¾ majority of those present and voting at the
meeting of which 21 days’ written notice must be given.
➢Ordinary resolutions are resolutions passed by a simple majority of those present and
voting at the said meeting.
➢There are basically two types of resolution that is ordinary and special resolutions.
Minimum notice
Minimum votes
required
Ordinary resolution 14 days
More than 50%
Special resolution
75%
21 days
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Written resolution
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➢Section 297(2) of the Companies Act 2016 allows all the members of a
company to sign a written resolution.
➢This written resolution must be signed by all the members entitled to be
given notice and attend a company’s meeting personally or by proxy.
➢Once the last signature is made, the written resolution is treated as binding
and passed at the date it was signed
➢THE DOCTRINE OF UNANIMOS ASSENT: The authors of Ford’s Principles of
Corporation Law suggest the following limitations on the doctrine:
✓There must be actual, and not just potential, assent;
✓The assent must be fully informed;
✓The assent must be given by everyone entitled to receive a notice of
meeting;
✓The members’ decision must be within the power of members’ and for
proper purpose, and cannot relate to something that is within the exclusive
[power of the directors; and
✓Possibly, it will not be effective where the Companies Act itself requires that
the decision be taken at a meeting.
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PROCEDURAL IRREGULARITIES
✓Section 582 of the Companies Act 2016 provides that a
“procedural irregularity” including a “defect, irregularity
or deficiency of notice or time” in relation to a meeting
will not invalidate the meeting “unless the Court is of the
opinion that the irregularity has caused or may cause
substantial injustice that cannot be remedied by any order
declares the proceeding to be invalid”.
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THANK YOU
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