ACCA Applied Skills · Corporate and Business Law (Global)

Company meetings and resolutions: formula sheet

Full chapter guide

Key formulas

AGM: AGM = annual meeting of members for ordinary annual business; Usual business: accounts, final dividend, directors, auditors. Whether it is compulsory depends on the jurisdiction and company type.
General meeting (EGM): General meeting = any members' meeting other than the AGM; Called by the directors, or on a requisition by members holding the required minimum of voting rights as stated in the question.
Class meeting: Class meeting = meeting of holders of one class of shares only; Used mainly to approve a variation of that class's rights. Only that class votes.
Board meeting: Board meeting = meeting of directors, not members; Procedure is governed mainly by the articles. Decisions are usually made by majority vote.
Who can call a general meeting: Directors, OR members holding at least 5% of paid-up voting capital (requisition), OR the court; Typical model rule. The articles cannot normally set the requisition threshold higher than the statutory level.
Directors' duty on a valid requisition: Call the meeting within 21 days of the request, to be held no later than 28 days after the date of the notice; If the directors fail, the requisitioning members can call the meeting themselves. They must do so within three months of the date the directors became subject to the duty (that is, when the request was received). They can recover reasonable costs from the company.
Minimum notice: private company: 14 days for a general meeting (including any meeting to pass a special resolution); The notice period is counted in clear days, so the day of giving notice and the day of the meeting are both excluded. Notice sent by post is treated as received only after the deemed delivery period set by the Act or the articles, so count from the deemed date of receipt, not the date of posting. The articles may require longer.
Minimum notice: public company: AGM: 21 days. Other general meetings: 14 days; Public companies must hold an AGM each year. A private company need not. The 14 days for other general meetings does not depend on any extra conditions. Traded companies follow a separate rule that is outside the scope of this page.
Short notice: private company: Majority in number of members entitled to attend and vote, holding at least 90% of the voting shares; Articles may raise the percentage, but not above 95%.
Short notice: public company: AGM: all members entitled to attend and vote. Other general meetings: majority in number holding at least 95% of the voting shares; Much harder than for a private company, because the public may hold shares.
Content of notice: Time, date and place + general nature of business + statement of right to appoint a proxy + full text of any special resolution + AGM label if it is an AGM; Ordinary business needs only a general description. The text of a special resolution must be given in full.
Who must receive notice: Every member entitled to vote + directors + the auditor; Check the articles for any members who are excluded, for example holders of non-voting shares.
Resolution thresholds (for context): Ordinary resolution: more than 50% of votes cast. Special resolution: at least 75% of votes cast; Notice requirements apply to both. The 75% for a special resolution is not the same as the 90% needed for short notice.
Quorum rule: Valid meeting = quorum present (articles; default usually 2 members, in person or by proxy); Always apply the number in the articles first. Use the default only if the question gives none.
Show of hands: One member present in person = one vote; a proxy generally = one vote (rules on multiple proxies vary by jurisdiction); Shares held are irrelevant. The number of shares does not change the count. The rules on multiple proxies, or on a member who attends and also appoints a proxy, vary by jurisdiction. Follow any rule the question states.
Poll vote: Votes = number of shares held (or as the articles state); Used when weight of holding matters. The articles cannot exclude the statutory right to demand a poll. Who may demand one, and the proportion required, are set by law and the articles.
Proxy: Proxy = agent for a member; need not be a member; notice must reach the company by the deadline; A proxy attends, speaks and votes as the appointing member could, on a show of hands and on a poll, subject to the jurisdiction and the articles. Voting follows the instructions on the form.
Ordinary vs special resolution: Ordinary: simple majority, more than 50% of votes cast. Special: at least 75% of votes cast; These are the general thresholds. If the question gives different rules, the question's rules prevail. Both are measured on votes cast, not shares in issue or members present. Abstentions and absentees are not votes cast.
Who can use written resolutions: Private company: yes. Public company: no; A public company must hold a general meeting.
Ordinary resolution by writing: Votes in favour > 50% of total voting rights of eligible members; The base is all eligible votes, not only those cast.
Special resolution by writing: Votes in favour ≥ 75% of total voting rights of eligible members; Exactly 75% passes. Non-replies do not count as support.
Excluded decisions: Removal of a director or auditor before term ends: meeting required; Written resolution cannot be used for these.
Filing: Special resolutions (and certain others) filed with registrar within 15 days; The 15-day period is the UK model. Late filing is a default, not invalidity.
Removal vote: Director removed by ordinary resolution = more than 50% of votes cast; Votes cast at the meeting, not all members. Abstentions and absent members are not counted.
Special notice period: Special notice to company ≥ 28 days before the meeting; The 28 days run from notice given to the company to the meeting date. The company gives members notice of the resolution in the same manner and at the same time as the notice of meeting. Only if that is not practicable does it give notice by advertisement or as the articles allow, at least 14 days before the meeting. If a meeting is called for a date 28 days or less after special notice was given, the notice is treated as properly given.
Method for removal: Removal must be at a general meeting, with special notice; A written resolution cannot be used to remove a director (or an auditor).
Director's rights: Written representations + right to be heard at the meeting; Representations must be of reasonable length. If they are not sent out, the director can require them to be read out. The director is entitled to be heard even if not a member.
Compensation: Removal does not remove a claim for breach of contract; Compensation for loss of office is a separate matter from the validity of removal.

Quick revision

A general meeting is open to all members, with voting rights depending on the class of shares held; a class meeting is for holders of one class of shares only.
Valid notice must reach every member entitled to receive it and state the time, place and nature of the business.
Accidental failure to give notice to one person does not always invalidate a meeting, but deliberate failure will.
A quorum is the minimum number of members needed present for business to be valid; without it, decisions are not valid.
A proxy is a person appointed by a member to attend and vote on the member's behalf; the proxy need not be a member.
A vote by show of hands and a poll are different: on a show of hands each member present has one vote, regardless of shareholding, whereas on a poll votes are counted by shares held (and proxy votes can be counted), so it reflects voting power.
At a meeting, an ordinary resolution needs more than 50% of votes cast.
At a meeting, a special resolution needs a higher majority, usually at least 75% of votes cast.
At a meeting, abstentions and non-votes are not votes cast, so they do not count in the percentage.
A written resolution lets members decide without a meeting, but the required level of agreement still applies. Under some systems (e.g. UK) the majority is measured against all eligible members, not votes cast at a meeting, so members who do not reply effectively count against. Follow the rule given in the question or ACCA material; do not treat this as universal.
Special notice is notice of the intention to propose a resolution, such as removing a director. The proposer gives it to the company within a minimum period before the meeting, and the company then notifies the members.
A director facing removal has the right to be informed and to put their case to the members. In many systems (e.g. UK Companies Act 2006 s168) removal is by ordinary resolution with special notice; take the rule from the question or ACCA material.

Common mistakes

Treating a board meeting as a type of general meeting. Fix: Remember that general meetings are of members. Board meetings are of directors.
Saying every company must hold an AGM. Fix: Check the company type and the jurisdiction's rule given in the question. Private companies are often exempt.
Using 14 days for every general meeting. Fix: Always ask: private or public, and AGM or other meeting? Write the period next to the answer before you choose.
Counting the short notice percentage on the number of members instead of the shares held, or the other way round. Fix: Apply both tests. There must be a majority in number of members, and they must hold the required percentage of voting shares.
Counting shares on a show of hands. Fix: On a show of hands count people: each member present in person has one vote and a proxy generally has one vote. Only a poll weighs shares.
Saying a proxy must be a member of the company. Fix: A proxy can be any person the member chooses. The member holds the shares, not the proxy.
Saying a public company can pass a written resolution. Fix: Always check the company type first.
Measuring the majority against votes returned. Fix: For written resolutions, use total eligible voting rights. Non-replies count against.
Saying removal needs a special resolution (75%). Fix: Special notice is about notice time. Removal is by ordinary resolution, more than 50% of votes cast.
Allowing a written resolution to remove a director. Fix: Remember that removing a director (and an auditor) must be done at a general meeting so the director can be heard.

Exam tips

Underline who attends in the question. It often decides the answer at once.
Check whether the question says public or private company before stating AGM rules.
Use the percentage or period given in the question for requisitions. Do not rely on memory of a particular country's figure.
In a written answer, name the meeting, give its purpose and then apply it to the facts.
For class meetings, always state that only that class votes.
Write the company type and meeting type at the top of your rough working before you read the options. Most wrong answers come from using the wrong company's rule.
In Section B scenarios, mark the dates and percentages as you read. Notice questions are usually solved by arithmetic on those numbers.
For short notice questions, always run both tests (majority in number and percentage of shares). Examiners set questions where one passes and one fails.