Summary - Business Enterprise Law (BUEL6212)

LEARNING UNIT 8 – SHAREHOLDERS AND COMPANY MEETINGS


EXPLAIN ALL TERMINOLOGY RELATING TO MEETINGS, INCLUDING
QUORUM; PROXY; AND RECORD DATE
QUORUM
 The prescribed minimum number of persons, as determined by the
Company’s MOI or by the default provisions of the Companies Act, who
must be present at a meeting for it to commence (s63).
 Unless a company’s MOI says otherwise, a shareholders’ meeting may not
begin until sufficient persons are present at the meeting to exercise, in
aggregate, at least 25 per cent of all of the voting rights that are entitled
to be exercised in respect of at least one matter to be decided at the
meeting.
 A company’s MOI may specify a lower or higher percentage in place of the
Act’s default quorum of 25 per cent.
 If a company has more than two shareholders, a meeting may not
begin, or a matter may not be debated, unless at least three
shareholders are present at the meeting, and provided that the
members present can exercise at least the required percentage of voting
rights that they are entitled to exercise.


PROXY
 A proxy is a person who is appointed to represent a shareholder at a
meeting. At common law, there was no right to appoint a person to attend,
speak and vote on behalf of another.
 The Companies Act, 2008, changes the common law and allows a
shareholder to appoint any individual as his or her proxy. A person does
not have to be a shareholder in the company to be appointed as a proxy.
 Ingre v Maxwell - In this case, the court held that there must be at least
2 persons present to constitute a meeting. No valid meeting is constituted
where one person is in attendance and holds the proxies of all other
persons who were entitled to be present in that meeting.


Representation by proxy:
- The appointment of a proxy must be in writing and be signed by the
shareholder appointing the person.
- The appointment remains valid for one year after it was signed.
- The shareholder may appoint a proxy for a specific period of time specified
in the proxy appointment form.
- A shareholder of a company may appoint two or more persons
concurrently as proxies for them to exercise voting rights attached to
different shares held by the shareholder.
- A proxy may delegate authority to act on behalf of the shareholder to
another person.

, - A copy of the proxy appointment form must be delivered to the company
prior to the proxy exercising any rights of the shareholder at a
shareholders’ meeting.
 Section 58 (1) of the Companies Act provides that a shareholder of a
company may ‘at any time’ appoint any individual, including an individual
who is not a shareholder of that company, as a proxy to participate in, and
speak and vote at, a shareholders meeting on behalf of the shareholder.
 Moreover, s 15(1) provides that each provision of a company’s
Memorandum of Incorporation
(a) must be consistent with the Companies Act; and
(b) is void to the extent that it contravenes, or is inconsistent with, the
Act.


 The appointment of a proxy will be automatically suspended where the
shareholder acts directly on a particular matter.
 The shareholder who appoints the proxy has the right to revoke the
appointment by cancelling it in writing, or making a later inconsistent
appointment of a proxy and delivering a copy of the revocation instrument
to the proxy and to the company.
 At the meeting, the proxy is entitled to vote as he or she thinks fit, unless
the shareholder has indicated on the proxy appointment form whether the
proxy should vote in favour of or against a particular resolution.
 The company could invite shareholders on the proxy appointment form
to appoint a proxy from a list of names provided by the company. The
company cannot compel the shareholders to choose one or more of the
persons from the list.
 Should a shareholder wish to appoint someone who is not on the list, the
appointment form should provide enough space for the shareholder to fill
in the name of the person he or she wishes to appoint as proxy.
 The proxy appointment remains valid until the end of the meeting at which
it was intended to be used.


RECORD DATE
 Section 1 of the Act defines ‘record date’ as ‘the date…on which a
company determines the identity of its shareholders and their
shareholdings for the purposes of this Act.
 The record date is therefore important because it is the date that
determines shareholder rights – for example the right to receive notice of
a meeting and the right to vote at a meeting.
 The Act provides that the board of directors may set a record date for
determining which shareholders are entitled:
- to receive notice of a shareholders’ meeting;
- to participate in and vote at a shareholders’ meeting; and
- to decide any matter by written consent or electronic
communication.

, EXPLAIN THE TIME FRAMES FOR CALLING MEETINGS IN A PUBLIC
COMPANY
 The first annual general meeting of a public company must occur no
more than 18 months after the company’s date of incorporation.
 The subsequent annual general meetings must occur no more than 15
months after the date of the previous annual general meeting. The
Companies Tribunal may grant an extension if good cause is shown.


DISCUSS THE MATTERS THAT MUST BE DEALT WITH AT AN AGM
The following matters must be discussed at a companys AGM:
 presentation of the directors’ report, the audited financial statements for
the immediately preceding financial year and the audit committee report;
 election of directors;
 appointment of an auditor for the ensuing financial year and appointment
of the audit committee; and
 any matters raised by shareholders, with or without advance notice to the
company.