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

Kestrel plc has issued share capital of 1,000,000 voting shares. Shareholders holding 60,000 voting shares formally require the directors to call a general meeting, but the directors refuse. Under the standard rule that members holding at least 5% of paid-up voting capital may require a meeting, what is the correct position?

The members hold 6%, exceeding the 5% requisition threshold, so the directors must call the meeting. If they fail within the set period, the requisitioning members may call it themselves, without needing a court order or a 25% holding.

  1. AThe members cannot act because only the board may call meetings
  2. BThe members have met the 5% threshold, so the directors must call the meeting, and members may call it themselves if the directors fail to do so within the set periodCorrect
  3. CThe members need at least 25% before the directors are obliged to act
  4. DThe members must first obtain a court order in every case

Explanation

60,000 of 1,000,000 is 6%, above the 5% threshold, so the requisition is valid. Directors must then call the meeting within the statutory period, and if they do not, the requisitioning members may call it themselves at the company's expense. 25% is the wrong figure and a court order is not first required.

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