A public company with only one member does not have to hold an annual general meeting: s 250N(4). All other public companies must hold an AGM when required by (s 250N(1)). EXICOM LTD V FUTURIS
CORPORATION LTD : 1995) 61 FCR 337; (1996) 14 ACLC 39; (1995) 18 ACSR 711 discusses how this time period may be extended by ASIC.
Under s 317, the financial report, the directors’ report and the auditors’ report must be laid before the meeting.
The business may also include (under s 250R) consideration of the annual financial reports, directors’ and auditor’s reports, the election of directors, the appointment of the company auditor and the fixing of the auditor’s remuneration.
Under s 250S the chair of the AGM must give the members as a whole a reasonable opportunity to ask questions or make comments concerning the management of the company. Similarly, where the company’s auditor or representative is present at an AGM, under s 250T the chair must give the members as a whole a reasonable opportunity to ask the auditor or their representative questions concerning the company’s audit and financial reports. At present there is no requirement for the company’s auditor or their representative to be present at the
AGM: Corporations Act, s 250T. However, CLERP 9 recommends the removal of this discretion on the part of the company auditor of a listed public company. CLERP 9 recommends that changes be made to the Corporations
Act so that attendance by a company auditor at a listed public company’s AGM is mandatory.
Sections 250S and 250T only require that the chair provide a reasonable opportunity to ask questions. There is no requirement for a director or company auditor (or their representative) to answer any questions. Sections 250S and 250T also refer to the members as a whole and do not state that each individual member has the right to demand the opportunity to ask questions.
The general meeting is any meeting which is not an AGM. It can be called for hareholders vote on resolutions in relation to matters such as appointment and removal of directors (ordinary resolution), a reduction in the company’s share capital through extinguishing uncalled amounts on shares (special resolution) or the voluntary winding up of a company (special resolution).
Class meetings are the meetings of shareholders in a limited company where a resolution is passed to vary, cancel or modify the rights attached to a particular class of shares.
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An ‘ordinary resolution’ means a resolution that has been passed by a simple majority of votes cast by members present and entitled to vote on the resolution. A ‘special resolution’ means a resolution that has been passed by at least 75 per cent of the votes cast by members entitled to vote on the resolution: Corporations Act, s 9.
A proprietary company with more than one member may pass a circulating resolution without holding a general meeting under s 249A. Body corporate representatives may sign (section 250D) and resolutions passed under s
249A must be recorded in the company’s minute books: s 251A.
It is a replaceable rule that a director of a company may call a members’ meeting: s 249C. However, a director of a public company listed on the Australian Stock Exchange (ASX). However, no provision in the constitution can prevent a listed public company’s director from calling a members’ meeting: ss 249CA(1) and (2).
Under s 249D(1), the directors of a proprietary or public company must call and arrange to hold a members’ meeting if requested to do so by:
 member or members with at least 5 per cent of the votes that may be cast at the general meeting; or
 at least 100 members who are entitled to vote at the general meeting.
The request must satisfy the section 249D(2) formal requirements. Within 21 days after the company receives the request, the directors must call a members’ meeting: s 249D(5), which must be held not later than two months after the company receives the request: s 249D(5). The case of ASIC V NRMA [2002] NSWSC 1135; (2003) 21
ACLC 186 discusses when the meeting has been “held”. The case of
NRMA V PARKIN [2004] NSWSC 153; (2004)
22 ACLC 861 discusses whether a resolution is ambiguous.
Where the directors fail to call a meeting after being requested to do so, members who have more than 50 per cent of the votes of all the members, and who make a request under s 249D, may call and arrange a members’ meeting: s 249E(1). The company must pay the reasonable expenses of such a meeting, but may recover the expenses from the directors: ss 249E(4) and (5). Directors are not liable to pay the expenses of a meeting held under s 249E if they can show that they took all reasonable measures to comply with the members’ request to call and arrange a general meeting: s 249E(5). It is not necessary for the requisition to come to the attention of the directors: BROWNE v PANGA PTY LTD (1995) 13 ACLC 853.
Section 249F(1) provides that the members of a company with at least 5 per cent of the votes that may be cast at a general meeting may call, arrange and hold a meeting. The members must pay for all of the expenses associated with calling and holding the meeting. In this situation the meeting is to be called in the same way as a general meeting is normally called: s 249F(2). There is no provision for 100 members to call a general meeting under section 249F.
Where a court determines it is impracticable to call a meeting in any other way, a court may order a general meeting upon the application of any director or any member entitled to vote at the meeting: ss 249G(1) and (2).
When making an order under s 249G, a court may give any directions it thinks fit in relation to the calling, holding or conduct of the member’s meeting: s 1319. Mere speculation concerning potential problems associated with the calling and holding of a general meeting is not sufficient grounds for a court to exercise discretion to order a meeting under s 249G. FIORE AND HUNTER v CARLTON FOOTBALL CLUB [2002] VSC 455; (2003)
21 ACLC 145, and BECK v TUCKEY PTY LTD [2004] NSWSC 357; (2004) 22 ACLC 633, discuss when a court will, and will not, exercise this power.
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Under s 1322(2) a procedural irregularity does not make a proceeding invalid unless the court is of the opinion that the irregularity has caused or may cause substantial injustice that could not be remedied by any court order. If the court is of this opinion then the court will declare the proceeding to be invalid: Corporations Act , s 1322(2).
Section 1322(3) provides that a meeting, notice of a meeting or any proceeding at a meeting is not invalidated because of an accidental omission to give notice or because of the failure of a person to receive notice. However, a court may declare a meeting void upon the application of the person who failed to receive notice, any person entitled to vote at the meeting in question or ASIC: s 1322(3).
Section 1322(3A) provides that where a member has not had a reasonable opportunity to participate, a members’ meeting is only invalid if the court is of the opinion that substantial injustice has been caused or may be caused, and the injustice cannot be remedied by a court order: s 1322(3A)(a). Where the court is of this opinion it will declare void the meeting, a part of the meeting or a proceeding at the meeting: s 1322(3A)(b).
The Bell Resources case set out below gives some examples of proceedings that are not legal proceedings.
Section 1322(1)(b) provides that a procedural irregularity includes:
• a failure to have the required quorum at a meeting of shareholders, directors or creditors
• a defect, irregularity or deficiency of notice or time.
Section 1322(4) covers the orders that a court may give, and section 1322(6) requires a court to be satisfied of certain matters before it grants an order.
Unlisted companies : A company not listed on the ASX must give (its members and directors) at least 21 days’ notice of a general meeting: (or such longer period specified in the constitution): s 249H(1). Unless otherwise stated in the company’s constitution, a meeting may be called on less than 21 days’ notice if all of the members entitled to vote agree before notice is given: s 249H(2)(a). A general meeting may be called on less than 21 days’ notice if members with at least 95 per cent of the votes that may be cast agree before notice is given: s
249H(2)(b). However, at least 21 days’ notice of a general meeting must be given where a resolution will be voted upon to remove a director under s 203D or appoint a director to replace a director removed under s 203D: s
249H(3), or to remove a company auditor under s 329: s 249H(4).
Listed companies : Section 249HA(1) requires at least 28 days’ notice of a general meeting for listed companies, even if a shorter period is specified in the company’s constitution: s 249HA(3).
Notice of a general meeting must be given individually to each director and to each member entitled to vote: s
249J(1). The notice under s 249J(1) only has to be given to the one joint holder:: s 249J(2). Under s 249J(3), the company may give notice to each member:
 personally
 by sending the notice by post to the member’s address, as recorded in the member’s register
 by sending it to the member’s fax number or electronic address
 by any other means that the company’s constitution (if any) permits.
Company auditors are also entitled to notice of a general meeting in the same way as members: s 249K. Section
249J(1) requires that notice of a general meeting must be given individually to each director and to each member entitled to vote. RE CANBERRA LABOR LTD [1986] ACTSC 103; (1987) 5 ACLC 84 discusses whether a general meeting is invalid if some members entitled to vote do not receive notice.
Section 249L requires that the notice of a general meeting:
 give details of the place, date and time of the meeting
 specify details of the technology to be used where the meeting is to be held in two or more places
 give details of the general nature of the business to be addressed
 state any special resolutions to be moved at the meeting
 if members are entitled to appoint a proxy, state that members are so entitled, and specify whether the proxy has to be a member of the company; state that a member entitled to cast two or more votes at the
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general meeting may appoint two proxies (not one proxy for each vote) and specify the proportion or number of votes that each proxy can exercise.
Directors have a fiduciary duty not to mislead members, and must therefore make a full disclosure of information which would enable shareholders to decide whether or not to attend the meeting, and explain in sufficient detail the business to be considered at the meeting.
Section 249N(1)(a) of the Corporations Act provides that members with at least 5 per cent of the votes that may be cast on the resolution may notify the company that they propose to move the resolution at a general meeting.
Alternatively, at least 100 members who are entitled to vote at a general meeting may give the company notice that they intend to move a resolution at a members’ meeting: s 249N(1)(b). Section 249N(2) sets out the requirements of the notice to the company.
Where a company has received notice under s 249N, the members’ resolution must be moved at the next general meeting that occurs more than two months after the notice is given to the company: s 249O(1). The company must send a notice of the members’ resolution to all of the company’s members as possible after the notice of the meeting: s 249O(2).
The company must pay the cost of complying with s 249O(2) unless it did not receive the members’ resolution in time to send out notice of it with the notice of the meeting: s 249O(3). If this situation arises, the members requesting the resolution are jointly liable for the expenses unless at a general meeting the company resolves to pay the expenses itself: s 249O(4).
However, s 249O(5) provides that the company does not have to give notice of a members’ resolution if the resolution is more than 1000 words long or if it is defamatory, or if the requesting members are to pay for the notice of the resolution.
A general meeting must be held for a proper purpose (s 249Q) and at a reasonable time and place: s 249R.
General meetings may be held at two or more venues, using any technology that gives the company’s members as a whole (not necessarily individual members) a reasonable opportunity to participate: s 249S. Sections 249Q and
249R are considered in the Howard case example set out below. Section 1322(3A) will apply if members ‘as a whole’ do not have a reasonable opportunity to participate (or if there is was a problem with the technology being used to hold the meeting at different venues) and substantial injustice would be caused as a result. HOWARD v
MECHTLER [1999] NSWSC 232; (1999) 17 ACLC 632; (1999) 30 ACSR 434 deals with procedural rregularity, inadequacy of notice, improper purpose and reasonable time of a meeting.
According to section 249T (replaceable rule), the quorum for a general meeting of a company is two members and the quorum must be present throughout the meeting: s 249T(1). Companies with only one member can pass a resolution if that member records the resolution and signs the record: s 249B(1). Where a member has appointed more than one proxy or body corporate representative, only one of them is counted for the purposes of the quorum. Where a person is attending a general meeting as both a member and as a proxy or body corporate representative, they are only counted once. Otherwise, each person is counted once for purpose of quorum.
Section 249T(3) provides that if a quorum is not present within 30 minutes of the time specified in the notice of the meeting, the directors must adjourn the meeting to a date, time and place that they determine. The resumed meeting will be dissolved if no quorum is present within 30 minutes of the time specified for the resumed meeting: s 249T(4). A resolution is passed at a resumed meeting on the day it is actually passed: s 249W(1). It is a replaceable rule that at a resumed meeting only unfinished business is to be dealt with: s 249W(2).
Section 249U(1) provides that the directors may elect any individual to chair the company’s general meeting
(whether involved with the Company or not). If the directors choose not to elect a chair prior to the general meeting or if a person is elected but they cannot be chair, or decline to be chair, then the directors must elect an individual who is present at the meeting to be chair: s 249U(2). Section 249U(3) provides that the members at a general meeting must elect a member who is present at the meeting to be chair if the directors have not previously
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elected a chair, or if a previously elected chair is not available or declines to be chair. The members at a general meeting with the majority of votes have the power to direct the chair to adjourn the meeting: s 249U(4).
A company auditor has the right to attend any general meeting and be heard in relation their capacity as an auditor: ss 249V(1) and (2), even if the auditor will retire at the meeting or if the meeting passes a resolution to remove the auditor: s 249V(3). Where an auditor or their representative is present at an AGM, the chair of the
AGM must give the members as a whole a reasonable opportunity to ask the auditor or their representative questions concerning the company’s audit and the financial reports: s 250T.
For a company with share capital, on a show of hands each shareholder has one vote: s 250E(1)(a). On a poll, each shareholder has one vote for each share they hold: s 250E(1)(b). S 250E is a replaceable rule.
For a company without share capital, each member has one vote for each resolution, irrespective of whether the vote is taken on a show of hands or a poll: s 250E(2) (replaceable rule).
The chair of a general meeting is entitled to exercise a casting vote in addition to the votes they may have in their capacity as a member of the company: s 250E(3)(replaceable rule). The note to s 250E(3) states that the chair may be precluded from voting, for example, by a conflict of interest.
Under s 250G(replaceable rule) it is possible, at a general meeting, to challenge a person’s right to vote. The chair decides the outcome of the challenge.
Where a vote is taken on a poll, a person with the right to cast two or more votes may either refrain from casting all of their votes or may cast their votes in different ways: s 250H.
Section 250J (a replaceable rule) deals with the way in which voting is carried out. Section 250K(1) provides that a poll may be taken on any resolution, but s 250K(2) provides that a company constitution may prohibit a poll being taken on a resolution to elect the chair of a meeting or to adjourn a meeting. Any demand for a poll may be withdrawn: s 250K. Section 250L(1) specifies who can demand a poll, and section 250L(3) specifies when a poll may be demanded.
Section 249X is a replaceable rule for proprietary companies and a mandatory rule for public companies, and provides that any member of a company who is entitled to vote at a general meeting of the company may appoint a proxy to attend the meeting and vote on behalf of the member: s 249X(1). The appointment may state the percentage or total number of votes available to the proxy: s 249X(2). A member who is entitled to cast two or more votes at a meeting may appoint two proxies to attend and vote at the meeting: s 249X(3). Under s 249X(3) a member with more than two votes is not allowed to appoint more than two proxies. The appointment of two proxies is the maximum allowed.
Where the appointment of two or more proxies does not specify the percentage or number of votes to be cast by the proxy, the proxy may exercise half of the member’s votes: s 249X(3). Section 249Y(1) sets out the rights of proxies at meetings. Section 249Y(2) allows a constitution to prevent a proxy voting on a show of hands, but under s 249Y(1) a proxy may still join in a demand for a poll.
DONROB ENTERPRISES PTY LTD V QUEENSLAND PETROLEUM MANAGEMENT LTD (1989)
14 ACLR 307; (1989) 7 ACLC 255 discusses whether two proxies appointed by one member can constitute a quorum.
Section 251A(1) requires each company to keep minute books, and obliges the company to record, within one month,
 proceedings and resolutions of general meetings and directors’ meetings
 resolutions passed by members or directors without a meeting
 declarations by the sole director of a proprietary company.
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Either the chair of the meeting or the chair of the next meeting must sign the minutes within a reasonable time: s
251A(2). The company must keep its minute books at its registered office, its principal place of business or at another place approved by ASIC: s 251A(5). The case example of ASIC V WHITLAM [2002] NSWSC 591 is an illustration of altering the minutes of a meeting.
Under s 251AA(1)a listed company must record in the minutes of a meetings the total number of proxy votes exercisable by all proxies on each resolution. If a resolution is decided by a show of hands, the company must record in the minutes the total number of votes specified by the appointments to be for a resolution and against a resolution. The minutes must also record the total number of proxy votes where the appointments specify that a proxy is to abstain from voting on a particular resolution or whether the proxy is to exercise discretion: s 251AA(1)(a).
Where a resolution is decided on a poll, s 251AA(1)(b) requires, in addition to s 251AA(1)(a) and despite anything in the company’s constitution, the total number of votes cast on a poll: in favour of the resolution, against the resolution and abstaining from the resolution.
The members of a company must be allowed free access to the company’s minutes: s 251B(1). A member may also make a request to the company for a written copy of any minutes: s 251B(2). Where a company does not require the member to pay for the copy, it must send the copy to the member within 14 days of the request or within any longer period approved by ASIC: s 251B(3). There is a similar requirement on the company if the member has to pay for the copy: s 251B(4).
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