Notice General

Who has the authority to issue a notice convening a meeting of members?

Nearly all meetings of companies are convened by the directors. It should be a collective board decision and not a decision just taken by one or more directors. They must convene annual general meetings if it is a requirement, and must convene a general meeting if a valid requisition is received from the necessary number of members. If the directors fail to convene a requisitioned meeting, the requisitionists (or a proportion of them) may do so. In certain circumstances the court may order a meeting to be convened. Reg. 37 of Table A provides that if there are not within the United Kingdom sufficient directors to call a general meeting, any director or any member of the company may do so. This may be useful if most or all of the directors resign or die at about the same time.

The notice convening the meeting must state the authority of the signatory. It is usual for notices to be signed by the secretary (if there is one) following the words 'By Order of the Board'.

To whom should notices be sent?

The list is:

All members - this is subject to any limitations in the articles. Each joint member should receive a notice unless, which is usually the case, the articles provide otherwise.

Directors - this is a statutory requirement unless the articles provide otherwise.

Auditors - this is a statutory requirement.

These are the standard requirements but the requirement may extend to others in certain cases and where special requirements are imposed by the articles. Preference shareholders may be a case in point.

What is the consequence if a notice is not sent to someone entitled to receive a notice?

The meeting may be challenged and business conducted at it may be declared to be invalid.

What is the position if there is an accidental failure in giving notice of a resolution or a meeting?

Section 313 provides that, unless the articles state differently, this will be disregarded and that the proceedings will not be invalid. This is just as well as the largest listed companies have a million or more shareholders. It would otherwise be exceedingly unfortunate if 999,999 notices were correctly sent and one fell down a crack in the floorboards.

The words 'accidental omission' should be particularly noticed. A deliberate omission may well invalidate the meeting, even if the deliberate omission was for a presumed good reason. For example, a failure to send a notice to a member who was believed to be away (and actually was away) has been held to be not an accidental omission, with the result that the meeting was held to be invalid.

Section 313 makes exceptions for notices given under:

Section 304 (notice of meetings required by members)

Section 305 (notice of meetings called by members)

Section 399 (notice of resolutions at AGMs proposed by members)

Is the notice that convenes a meeting relevant to establishing whether or not it is an annual general meeting?

It is, and what is more it is the determining factor. A notice should say whether the meeting is an annual general meeting or a general meeting. A meeting is only an annual general meeting if this is stated by the notice that convened it. If the notice is silent on the point, the meeting is automatically a general meeting.

Notice periods

What are the required periods of notice for the different types of meeting?

21 clear days for an annual general meeting of a public company.

Subject to conditions 14 clear days for a general meeting of a traded company, otherwise 21 clear days.

14 days for a general meeting of an untraded company.

"Clear days" were defined in the answer to Question 353. If the articles specify longer periods than the above, they will apply. If the articles specify shorter periods than the above, the particular articles, except in respect of an adjourned meeting, will be void and the above periods will apply.

Certain types of resolution require certain periods of notice. If they are longer than the periods given above, then longer notice must be given.

In what circumstances is short notice possible?

An annual general meeting of a public company may be held on short notice only with the consent of every member entitled to attend and vote.

A general meeting of a public company may be held on short notice with the consent both of members comprising a majority in number and 95 per cent of the share capital.

A general meeting of a private company may be held on short notice with the consent both of members comprising a majority in number and 90 per cent of the share capital. Articles may bring the required percentage up to 95 per cent.

In the case of a private company not having a share capital, a meeting may be held on short notice with the consent of a majority of the members and 90 per cent of the voting rights.

It should be noted that short notice is not the same as no notice. All members should have notice and a chance to attend.

As an example let us consider a private company having 11 shareholders, and that one of them has 90 per cent of the votes. For a short notice meeting to be held it is necessary to obtain the consent of six shareholders, including the one who holds 90 per cent of the votes.

Content of notices

What must be included in a notice convening a meeting?

A notice should contain:

The date and time of the meeting.

The place of the meeting.

Whether the meeting is an annual general meeting or a general meeting.

A general description of the business to be transacted.

The precise wording of certain resolutions.

The notice must include (or be accompanied by) a statement concerning members' rights to appoint a proxy to attend and vote on their behalf.

Are there any particular requirements concerning the date, place and time of a meeting?

The choice is made by the persons who convene the meeting, which is almost always the directors. They have a common law duty to make the date, place and time reasonably convenient for the majority of members. Failure to do this could lead to a successful challenge. To take an extreme and fanciful example, 11.30 pm on Christmas Eve at the top of Mount Snowdon would undoubtedly be deemed to be not reasonably convenient for the majority of members.

What exactly is meant by the requirement that a notice should give a general description of the business to be transacted?

Members must be given sufficient information for them to make an informed choice about whether or not they wish to attend and vote at the meeting. If they do not receive the required standard of information, there is a risk that business transacted may be held to be invalid. Fuller details must be given of any business that the articles fix as special business and the precise wording of certain resolutions must be given. Over and above this, the notice must make it clear, in general terms, what business is to be conducted. This may seem rather imprecise but it is the explanation usually given.

What information about the right to appoint a proxy (or proxies) must be included in the notice?

The notice must draw attention to the rights given by Section 324 of the Act. Section 324 reads in full as follows:

'(1) A member of a company is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak and vote at a meeting of the company.

(2) In the case of a company having a share capital, a member may appoint more than one proxy in relation to a meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him, or (as the case may be) to a different £10, or multiple of £10, of stock held by him.'

Any additional rights given by the articles must also be included. These rights apply in all companies, which was not the case prior to the Companies Act 2006.

Is it essential that proxy forms accompany notices?

Except for listed companies and subject to anything to the contrary in the articles, there is no compulsion to circulate proxy forms with the notices. It is, though, often done.

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