Company Meetings and Resolutions for ACCA LW

What this chapter covers

Company meetings and resolutions: topics in the order to study them

1. 1Types of Company MeetingsStart here to learn the vocabulary: annual general meetings, general meetings and class meetings, and who attends each.
2. 2Calling and Notice of General MeetingsOnce you know the meeting types, learn who can call them and what valid notice must contain, since a meeting without proper notice is open to challenge.
3. 3Conduct of Meetings: Quorum, Voting and ProxiesThis follows naturally: once a meeting is validly called, you need the rules that make its decisions valid.
4. 4Types of ResolutionsVoting rules make sense only once you know the majority each resolution type needs and which business needs which type.
5. 5Written Resolutions and Filing RequirementsLearn this after the formal meeting route so you can compare it and see when a meeting is not needed and what must be recorded or filed.
6. 6Special Notice and Removal of Directors by ResolutionThis is the most applied topic and pulls together notice, resolutions and director rights, so it comes last.

How to prepare Company meetings and resolutions

1. Learn the meeting types and write one line on the purpose of each.
2. Memorise the validity checklist: who called it, was notice sufficient, was it given to everyone entitled, was there a quorum.
3. Learn the two main resolution types with their majorities, and list typical business for each. Remember the base for the majority. For a resolution at a meeting, it is counted on votes cast, not on all members. For a written resolution, the base depends on the system. Under some systems (e.g. UK) it is measured against all eligible members, so silence does not count as a vote for. Follow the rule given in the question or ACCA material, and do not treat it as universal.
4. Practise short vote calculations. For example, at a meeting, if 600 votes are for and 200 against, 600 ÷ 800 = 75%, which meets a requirement of at least 75% for a special resolution.
5. Compare written resolutions with meetings: what they replace, what agreement they need (and the base it is measured against, as given in the question or ACCA material), and what must still be recorded or filed.
6. Work through the director removal steps: special notice, the director's right to be heard, and the resolution type required. In many systems removal is by ordinary resolution with special notice (e.g. UK Companies Act 2006 s168). Take the rule from the question or ACCA material.
7. Finish with timed objective questions and review every wrong answer by naming the exact rule you missed.

Common mistakes in Company meetings and resolutions

• Using the wrong base for the majority: counting against all members for a resolution at a meeting, or using votes cast for a written resolution where the rules measure against all eligible members.

  Fix: Check the type of resolution. At a meeting, use votes cast and ignore abstentions and absentees. For a written resolution, use the base given in the question or ACCA material. Under some systems (e.g. UK) this is all eligible members, so silence does not count as a vote for.

• Mixing up quorum with the majority needed to pass a resolution.

  Fix: Treat them as two separate steps. Quorum decides if the meeting can transact business; the majority decides if the resolution passes.

• Assuming a proxy must be a member or can only speak, not vote.

  Fix: Remember that a proxy acts for the member and may vote, and usually need not be a member. Check any limits in the question.

• Treating any defect in notice as automatically making the meeting invalid.

  Fix: Ask whether the defect was accidental, whether it affected members entitled to notice, and whether the members agreed to short notice where that is allowed.

• Using the wrong resolution type for the business.

  Fix: Link each item to its effect. Routine business needs an ordinary resolution. Fundamental changes usually need a special resolution.

• Forgetting that a written resolution does not bypass the required level of agreement or the record-keeping steps.

  Fix: State that written resolutions need the required level of support, measured on the base the question or ACCA material gives, and must still be recorded or filed where the rules require it.

Last-day revision: Company meetings and resolutions

• ✓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.

Company meetings and resolutions practice questions

• Dalton Co's articles say a proxy appointment must be deposited with the company at least 48 hours before the meeting. Priya, a member, hands…
• Orchid Co's members unanimously and informally agree to approve a matter that the law says requires a special resolution, but they never hol…
• Quill Co, a private company, has three shareholders who each hold one third of the voting shares. Wishing to avoid a formal meeting, they pr…
• Fenwick Co is a company where the law requires an AGM each year. The board forgets to call one for the latest year. At the next general meet…
• Brindle Co's directors send notice of a general meeting to all members except Ms Okoro, a member entitled to attend, who was accidentally le…
• Members of Evra Ltd validly pass an ordinary resolution removing director Ms Faro, who has a five-year service contract with 3 years remaini…
• Upon receiving special notice of a resolution to remove director Omar from the board of Delta Co, the company notifies Omar. Omar wishes to …
• Orchid Co has its annual general meeting (AGM) each year. A shareholder asks what business is normally dealt with at an AGM. Which of the fo…

Company meetings and resolutions in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

• CS ExecutiveGeneral Meetings
• CMA FinalBoard Meetings and Procedures
• CS ProfessionalModel Code for Meetings of Non-Corporate Entities
• CA FoundationThe Companies Act, 2013