Company planning procedure – the procedure to be followed to create a meeting / for making decisions…
GENERAL THOUGHTS:
Maketa list of the decisions and work out what meeting is needed and who makes the decision
Determine whether multiple are needed – BM GM BM2
Model article 3 gives directors the general power to exercise all the power of the company.
NOTICE:
To call a board meeting – first notice must be given.
HOW:
Any director, or authorised person, can call a board meeting – Art 9.
The notice must stipulate the time, date and location of the meeting – Art 9(2).
The notice can be given in writing or orally – Art 9(3).
The notice period which is given must be reasonable for that company – Re Homer.
Who can give notice?
Has appropriate notice already been given?
What will be ‘reasonable’?
Does / did the notice contain all relevant information?
Could state what the resolution is to be proposed at the meeting for clarity…
TO HOLD A VALID BOARD MEETING - QUORUM:
To hold a valid board meeting – it must have a quorum which is two members, to be able to pass a decision validly – Art 11(2).
Note – check the articles to see if there are any special articles which have amended MA 11(2)/ if there is just one member
this is fine.
Need to bring in chairperson section…?
Who will have to be present (2 directors)
If there is only a sole director in the whole company – s318 CA allows this to count as a quorum & MA 7(2) states decisions will be
valid. Identify any interests held by the directors – explain any impact on the quorum / voting this interest may have.
DIRECTOR’S WITH AN INTEREST: Do this even if there is no interest – say there is no interest if there isn’t one.
If there is a director with an interest use CA and Articles…
CA S177(1): It is a duty for a director who has an interest in a proposed transaction to declare the nature and extent of the interest
to the other directors. The declaration must be done before the transaction is entered into (177(4)…
HOWEVER…there are some exceptions for a declaration having to be made…
S177(6): a director does not need to make a declaration when-
S177(6)(a): it is not reasonably regarded that a conflict of interest will arise
S177(6)(b): if the other directors are aware of the conflict of interest (the situation)
S177(6)(c): if the proposed transaction / arrangement concerns the terms of the directors service contract that are being
considered at a BM or by a committee of directors appointed for the purpose under the company’s constitution.
S177(5): a declaration is not required when the director with the interest is not aware of the transaction / arrangement in question.
Who is the director with an interest?
Have they made / do they need to make a declaration?
Does an exception under s177(6) or s177(5) apply?
State that even if an exception applies…a declaration would be appropriate anyway.
THEN…Even if a declaration has been made / did not need to be made due to an exception, under MA 14(1) if ‘x’ has an interest in
the proposed transaction/arrangement, then the director will not be able to count as participating or vote at the BM.
But they can be included if their situation falls within the exceptions under Art14(3) & (4):
MA 14(3)(a): The company has amended MA 14 (disapplied it so that a director can count and vote).
MA 14(3)(b): The director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest.
MA 14(3)(c): The directors conflict of interest arises from a permitted cause under MA14(4)…
MA14(4)(a): if a guarantee is given, or will be given, by or to a director in respect of an obligation incurred by or
on behalf of the company (or its subsidiaries)
MA 14(4)(b): subscription or an agreement to subscribe, for shares or other securities of the company (or
subsidiary), or to underwrite or guarantee subscription for any such shares or securities
MA 14(4)(c): an arrangement pursuant to which benefits are made available to employees and directors (and
former ones) of the company (or subsidiary) which do not provide special benefits for directors (including
former)
Has MA14 been disapplied? Will ‘x’ be able to count and vote?– consequences of this…? (is the quorum met- will the vote pass..?)
Does an exception apply? Is ‘x’ even a director yet – if not, ‘x’ cannot vote/count as a director yet anyway. If ‘x’ is a director being
appointed a service / employment contract – cannot vote.
GENERAL THOUGHTS:
Maketa list of the decisions and work out what meeting is needed and who makes the decision
Determine whether multiple are needed – BM GM BM2
Model article 3 gives directors the general power to exercise all the power of the company.
NOTICE:
To call a board meeting – first notice must be given.
HOW:
Any director, or authorised person, can call a board meeting – Art 9.
The notice must stipulate the time, date and location of the meeting – Art 9(2).
The notice can be given in writing or orally – Art 9(3).
The notice period which is given must be reasonable for that company – Re Homer.
Who can give notice?
Has appropriate notice already been given?
What will be ‘reasonable’?
Does / did the notice contain all relevant information?
Could state what the resolution is to be proposed at the meeting for clarity…
TO HOLD A VALID BOARD MEETING - QUORUM:
To hold a valid board meeting – it must have a quorum which is two members, to be able to pass a decision validly – Art 11(2).
Note – check the articles to see if there are any special articles which have amended MA 11(2)/ if there is just one member
this is fine.
Need to bring in chairperson section…?
Who will have to be present (2 directors)
If there is only a sole director in the whole company – s318 CA allows this to count as a quorum & MA 7(2) states decisions will be
valid. Identify any interests held by the directors – explain any impact on the quorum / voting this interest may have.
DIRECTOR’S WITH AN INTEREST: Do this even if there is no interest – say there is no interest if there isn’t one.
If there is a director with an interest use CA and Articles…
CA S177(1): It is a duty for a director who has an interest in a proposed transaction to declare the nature and extent of the interest
to the other directors. The declaration must be done before the transaction is entered into (177(4)…
HOWEVER…there are some exceptions for a declaration having to be made…
S177(6): a director does not need to make a declaration when-
S177(6)(a): it is not reasonably regarded that a conflict of interest will arise
S177(6)(b): if the other directors are aware of the conflict of interest (the situation)
S177(6)(c): if the proposed transaction / arrangement concerns the terms of the directors service contract that are being
considered at a BM or by a committee of directors appointed for the purpose under the company’s constitution.
S177(5): a declaration is not required when the director with the interest is not aware of the transaction / arrangement in question.
Who is the director with an interest?
Have they made / do they need to make a declaration?
Does an exception under s177(6) or s177(5) apply?
State that even if an exception applies…a declaration would be appropriate anyway.
THEN…Even if a declaration has been made / did not need to be made due to an exception, under MA 14(1) if ‘x’ has an interest in
the proposed transaction/arrangement, then the director will not be able to count as participating or vote at the BM.
But they can be included if their situation falls within the exceptions under Art14(3) & (4):
MA 14(3)(a): The company has amended MA 14 (disapplied it so that a director can count and vote).
MA 14(3)(b): The director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest.
MA 14(3)(c): The directors conflict of interest arises from a permitted cause under MA14(4)…
MA14(4)(a): if a guarantee is given, or will be given, by or to a director in respect of an obligation incurred by or
on behalf of the company (or its subsidiaries)
MA 14(4)(b): subscription or an agreement to subscribe, for shares or other securities of the company (or
subsidiary), or to underwrite or guarantee subscription for any such shares or securities
MA 14(4)(c): an arrangement pursuant to which benefits are made available to employees and directors (and
former ones) of the company (or subsidiary) which do not provide special benefits for directors (including
former)
Has MA14 been disapplied? Will ‘x’ be able to count and vote?– consequences of this…? (is the quorum met- will the vote pass..?)
Does an exception apply? Is ‘x’ even a director yet – if not, ‘x’ cannot vote/count as a director yet anyway. If ‘x’ is a director being
appointed a service / employment contract – cannot vote.
