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ACCA Applied Skills · Corporate and Business Law (Global) · Company meetings and resolutions

Arden Co is a private company whose constitution is silent on notice periods beyond the general law applied in the Global variant of the syllabus. The board wishes to call a general meeting to pass an ordinary resolution. Which of the following statements about the notice of that meeting is correct?

Notice of a general meeting must state the time, date and place and the general nature of the business. This lets every member entitled to attend decide whether to go or appoint a proxy. Limiting notice to directors or large holders, or hiding the business, is invalid.

  1. ANotice must state the time, date and place of the meeting and the general nature of the business to be transactedCorrect
  2. BNotice need only be given to the directors, since they manage the company
  3. CNotice need only state the date of the meeting; the business can be revealed when members arrive
  4. DNotice must be given only to members who hold more than 5% of the voting shares

Explanation

A valid notice must tell members when and where the meeting will be held and the general nature of the business, so they can decide whether to attend or appoint a proxy. Notice must go to all members entitled to vote, not only directors or large shareholders. Withholding the business until the meeting would defeat the purpose of notice.

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