Transcript CHAPTER 10 MEETINGS At the end of this topic you should know: • the procedures for meetings of the board of directors; • the.

CHAPTER 10
MEETINGS
At the end of this topic you should know:
• the procedures for meetings of the board of directors;
• the types of members’ meetings, their purposes, and when
and how they are called;
• the types of resolutions and their legal requirements;
• what is meant by a quorum and how it operates; and
• how voting takes place.
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Principles – Board Meetings
In solvent companies there are two important groups
who hold meetings.
Directors hold board meetings and members meet in
general or class meetings.
Meetings of directors can be very informal, but for a
“meeting” to have taken place, the directors must
show evidence that they have been given notice of
the meeting and have concurred in any action taken:
Wilson Manna Hill Mining Company Pty Ltd [2004].
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Board Meetings
Procedures of directors’ meetings are governed
primarily by the internal rules, and also:
• s 191: director to give notice of any material
personal interest;
• s 195: the right of a director to be present or vote
at particular board meeting is restricted where
there is material personal interest;
• s 251A: minute books kept and signed,
proceedings and resolutions recorded, and
declarations made by sole director; and
• s 248D: the use of technology may be used if all
directors consent.
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Board Meetings
In the absence of a provision to the contrary in the
internal rules, general law principles require that:
• each director is entitled to notice of a board
meeting even if they are overseas, provided they
can be contacted; and
• the notice does not need to specify what business
is to be conducted.
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Relevant Replaceable Rules
The relevant replaceable rules that apply (unless the
company has adopted a constitution that provides
otherwise) are:
• s 248A: directors may pass resolutions without a
meeting in certain circumstances;
• s 248C: any director can call a director’s meeting by
giving reasonable notice;
• s 248E: the directors must elect a chair;
• s 248F: a quorum is two directors unless otherwise
determined; and
• s 248G: resolutions must be passed by a majority
of directors. Interested director excluded: s 195
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Issues – Directors’ Meetings
Convening
Quorum
Voting
Resolutions
Use of technology
Chair
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Members’ Meetings –
Annual General Meetings
The provisions that relate to member’s meetings are
contained in Pt 2G.2.
There are three types of members’ meetings – the
annual general meeting, general meetings and class
meetings.
Only public companies with more than one member
must hold an AGM: ss 250N, 250P, 250PAA.
A proprietary company may have a constitution
requiring it to hold an AGM.
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Matters Considered at an AGM
The onus is on the directors of a public company to
call the AGM and present the following: financial
report, directors’ report and auditor’s report; the
election of directors; the appointment of the auditor;
and the fixing of the auditor’s remuneration: ss 250R
and 317.
It is also common practice for directors’ remuneration
to be considered at the AGM: s 202A.
The constitution may provide that other matters must
be considered at the AGM.
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Conduct and Questions
The AGM gives members of a company an
opportunity to ask the directors questions about the
management of the company and, if the company’s
auditor or a representative is present, a similar
opportunity to ask questions about the audit and
other relevant matters: ss 250S(1), 250SA and
250T(1).
The auditor of a listed public company or a suitably
qualified representative of the audit team must attend
the company’s AGM or face penalty of 10 penalty
units: s 250RA.
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General Meetings
Apart from the AGM, sometimes other general
meetings will be held, referred to as “extraordinary”
general meetings.
General meetings of a company can be called by:
• the board;
• the directors (ss 249C, 249CA);
• directors “requested” by members (s 249D);
• the members (s 249F); and
• the court (s 249G).
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Class Meetings –
Single Member Companies
Where a company’s shares are divided into different
classes, or there are different membership rights
attached to different shares, the Corporations Act may
require class meetings to be held: Pt 2F.2 and s 411.
As with single director companies, single member
companies can pass resolutions without holding a
“meeting”: ss 248B and 249B.
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Notice to Members
How Notice is Given
Contents of the Notice
Generally, at least 21 days’ notice of the meeting (or longer
if required by the company’s constitution) must be given to
the members: ss 249H(2) and 249H(1).
If the company is a listed company, then 28 days’ notice
must be given: s 249HA.
A copy of the notice must be given to each member,
director, and the company auditor: ss 249J(1) and 249K.
The manner in which the notice is give is prescribed by
s 249J(3)-(5).
The contents of the notice are prescribed by s 249L.
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Ordinary Resolutions
Special Resolutions
Member-initiated Resolutions
The company’s internal rules and/or the Corporations Act
will specify when an ordinary resolution of members is
required.
Ordinary resolutions are motions passed by a majority (that
is, at least 50%) of those members present and entitled to
vote.
Special resolutions are passed by at least 75% of the votes
cast by members entitled to vote on the resolution: s 9.
To be able to put any resolution, a minimum of 100
members must consent or the member(s) must control at
least 5% of the votes: s 249N(1).
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Quorum at Members’ Meetings
Conduct of Members’ Meetings
Unless the company’s constitution provides otherwise,
a quorum is:
• 2 members present at all times: s 249T(1); and
• single member company passes resolution by
recording and signing the resolution: s 249B.
As with the conduct of directors’ meetings, technology
may be used: s 249S.
The same rules requiring a company to keep minute
books recording the proceedings and resolutions
passed apply to members’ meetings: s 251A.
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Voting Rights and Procedures
Proxies and Body Corporate Reps
Votes cast by members at meetings may be counted
in two ways:
• show of hands (one vote for each person); or
• a poll (each share carries one vote).
5% of members or the Chair may request a poll:
s 250L(1).
A properly authorised person (proxy or corporate
representative) may vote instead of a member:
ss 249X-250D.
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Irregularities
Statutory Provisions
General Law Principles
Procedural and minor irregularities, such as lack of a
quorum, insufficient notice of directors’ or members’
meetings or lack of opportunity to participate in a
meeting, do not necessarily invalidate meetings or
proceedings: s 1322.
The court will only interfere where “substantial
injustice” has been caused or likely to have occurred
(s 1322) Chew Investment Australia Pty Ltd v General
Corp of Australia Ltd (1987).
The doctrine of unanimous consent provides that
where all the members have expressly or impliedly
waived those formalities, the decision will be binding:
Re Duomatic [1962].
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