When do the changes take effect?
The changes set out below apply to meetings convened on or after 1 October 2007. So, any meeting convened before this date, even if held after 1 October 2007, will apply the previous rules in the Companies Act 1985. In addition, if the meeting is convened following a request from members to call a meeting, then the new rules only apply if the members’ request was received on or after 1 October 2007.
Period of notice The period of notice required to call a meeting is no longer dependent on the type of resolution being proposed. Instead, general meetings will be called on 14 days notice, and annual general meetings held by a public company will require 21 days’ notice The Act confirms that clear days’ notice is required, and this means that the day on which notice is given, or deemed to be given, is ignored, as is the day of the meeting itself. The practical effect of this for most companies, where notice is deemed to be given 48 hours after serving, is that a notice posted on day 1 will be deemed served on day 3. 14 days notice ends on day 17 and then the meeting is held on day 18. The period of notice can be extended, but not shortened, by the articles, although it is possible for members to consent to short notice.
Consent to short notice
The percentage of members required to consent to short notice is reduced to 90% (from 95%) for a general meeting held by a private company and remains at 95% for a general meeting held by a public company. A public company may hold an AGM on short notice if all members so agree.
Form of the notice
The form of the proxy statement on the notice will change, because the Act requires the company to state, with reasonable prominence the member’s rights under CA06, s324 i.e. that:
(a) the member is entitled to appoint another person as his proxy to exercise all or any of his rights to attend, speak and vote at a meeting of the company; and
(b) a member of a company limited by shares may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him and to contain a statement of any more extensive rights to appoint more than one proxy conferred by the company’s articles. In addition, if the company includes an electronic address on the notice – such as an email or fax address – it will be deemed to have consented to members sending documents which relate to the meeting to the company by that means.
Proxies
Proxies are given new rights to both speak and vote on a show of hands at the general meeting. Previously this was only permitted if the company’s articles so provided. Proxies may also be appointed by a guarantee company. As seen above, a proxy of a company limited by shares may also appoint more than one proxy, as long as each proxy is appointed to exercise the rights attaching to different shares. The Act also provides that when calculating the period of time by which the proxy must be received by the company, only working days are counted. This is a change to the previous law where the date for receipt of a proxy form could have been a Saturday or a Sunday.
Corporate representatives
Corporate members may still appoint representatives to attend meetings. Their rights are extended so a corporate member can appoint more than one representative, but if this is done and the representatives all attend the meeting and try to vote in different ways, none of the votes are counted. So, if a corporate representative wishes to vote its shares in different ways, it will either have to appoint one representative or multiple proxies.
Requisition of meetings by members
The percentage of members who may require a meeting to be held is reduced from members holding 10% of the paid up share capital to members holding 5% if a general meeting has not been called by the members within the previous 12 months.
