Skip to content

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

Orchid Trading Ltd is a private company with two classes of shares, A and B. A resolution is proposed that affects only the rights of class B shares. Class A holders own 70% of all votes, and class B holders own 30%. Class B holders oppose the change. Which statement is correct about the class meeting for class B?

Only class B holders attend and vote at their class meeting, so class A's 70% of total votes does not decide the result there. Class B can therefore block the change if the rules require their class consent. Directors cannot override this.

  1. AOnly class B holders attend and vote at the class meeting, so class A holders cannot outvote them thereCorrect
  2. BAll members attend and the 70% class A holders decide the result
  3. CThe directors alone may decide because the meeting is a board matter
  4. DThe class meeting is invalid unless class A holders also vote

Explanation

A class meeting is attended by holders of the affected class only, and the vote is counted within that class. Class A's 70% of total votes is irrelevant there, so class B opposition can block the variation where the class consent is required. The directors cannot override that, and class A holders do not vote at the class B meeting.

Did you get it right without looking?

One question tells you little. A timed set on Company meetings and resolutions shows your real accuracy, how long you take and where you lose marks.

Practise Company meetings and resolutionsFree diagnostic mock

More Company meetings and resolutions questions