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

Delta plc has ordinary shares and 6% preference shares. The company proposes to vary the rights attached to the preference shares, and the articles provide that such a variation needs the consent of the preference shareholders. Which meeting is the appropriate way to obtain that consent?

A class meeting of the preference shareholders is the correct forum. Class meetings are held for holders of one class of shares to consent to a variation of the rights attached to that class. Neither the ordinary shareholders nor the creditors can give that class consent.

  1. AA class meeting attended by the holders of the preference sharesCorrect
  2. BAn annual general meeting attended only by the ordinary shareholders
  3. CA meeting of the creditors of the company

Explanation

A class meeting is held by the holders of a particular class of shares to approve or consent to a variation of the rights attached to that class. The ordinary shareholders are not the class affected, and creditors have no role in approving a variation of share class rights.

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