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

Brightwell plc has ordinary shares and 8% preference shares in issue. The company proposes to alter the rights attached to the preference shares, and the articles say such a change needs the consent of the holders of that class. Which meeting should be held to obtain this consent?

A class meeting of the preference shareholders is needed, because the proposed change affects the rights of that class and the articles require that class's consent. Meetings of ordinary shareholders, directors or creditors cannot give that consent.

  1. AA class meeting of the preference shareholdersCorrect
  2. BA general meeting of all ordinary shareholders only
  3. CA board meeting of the directors
  4. DA creditors' meeting

Explanation

Where the rights of one class of shares are to be varied, the consent of that class is usually required, and it is obtained at a separate class meeting of those holders. An ordinary-shareholders-only meeting is the wrong group, as the affected class is the preference shareholders. Directors' meetings and creditors' meetings do not give shareholder class consent.

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