Annual General Meetings

At an Annual General Meeting (AGM), a company will generally consider ordinary business, such as:

• The directors’ recommendation to declare a dividend, if a recommendation has been made;
• The financial statements, the directors’ report and the auditor’s report (where applicable);
• The election of persons as directors in the place of those retiring;
• The re-appointment of the outgoing auditors or the appointment of new auditors and the fixing of auditors’ remuneration;
• Other business, such as the amendment of the memorandum or articles of association of the company, which is known as special business.

The annual general meeting must be held within eighteen months of incorporation and every year thereafter provided that no more than fifteen calendar months do not elapse between them.

• A profit and loss account (or an income and expenditure account if the company is not trading for profit).
• A balance sheet.
• A director’s report.
• An auditor’s report.

These documents are required to be annexed to the Annual Return of a limited company (section 7 Companies (Amendment) Act 1986).

In addition, there must be a certificate, signed by both a director and the company secretary, certifying that the report and accounts are true copies of those laid before or to be laid before the company’s annual general meeting.

If a company fails to comply with the requirements of section 7 of the 1986 Act, the annual return will be rejected. In addition the company and every officer of the company who is in default, will be liable to a fine.

Right to notice of meetings

At least 21 days’ notice must be given in writing of an AGM. In the case of an EGM, 7 days’ notice is required for private companies and 14 days for public companies. The 7 day period for private companies can be shortened where the members and the company’s auditors agree to such shorter notice. However, 21 days is usually required in order to pass a special resolution, unless 90% of the members of the company agree to shorter notice.

Extended notice of 28 days must be given under the following circumstances:

• Where a resolution to remove a director is proposed-unless the articles of association of the company provide otherwise, or
• Where a resolution to replace an auditor is proposed at an AGM or to remove an auditor before the expiration of his term of office is proposed.

The meeting must be properly convened by notice, a quorum must be present and the meeting must be presided over by a chairman. A quorum is generally fixed at two members in the case of a private company and three in the case of a public company. Special resolutions and certain other significant resolutions must be forwarded by the company to the Registrar of Companies within 15 days of their being passed.

Where a company’s articles of association so provide, a resolution in writing signed by all of the members entitled to attend and vote on such a resolution at a general meeting is as valid and effective as if the resolution had actually been passed at a general meeting.

Polls

Table A of the First Schedule to the Companies Act 2014 sets out a standard set of articles of association. On incorporation a company can choose to use these articles or draw up its own.

The standard articles provide that every resolution shall be decided by a show of hands unless a poll is demanded. The standard articles then go on to set out when, and by whom, a poll may be demanded. Unless a poll is demanded, a declaration by the Chairman that a resolution has been carried or lost on a show of hands will be conclusive evidence of the proceedings.

Under the standard articles of association, a poll (vote) may be demanded as follows:

• By the chairman of the meeting or
• By at least three members in person or in proxy, or
• By any member or members present in person or by proxy and representing not less than one tenth of the total voting rights of all the members having a right to vote at the meeting, or
• By a member or members holding shares conferring voting rights, being shares on which an aggregate sum has been paid up equal to at least 10% of the total amount paid up on all voting shares.

The members of a company can of course alter the terms of the standard articles of association on incorporation or subsequently (provided that 75% of the members agree). However, where the articles are amended with regard to when a poll can be demanded, any changes will be void if they seek to have any of the following effects on entitlement to demand a poll:

• To exclude the right to demand a poll at a general meeting (other than on the election of a chairman and on the adjournment of the meeting)
• To make ineffective a demand made by any of the following parties
• Not less than 5 members having the right to vote
• A member or members representing not less than one tenth of the total voting rights of all the members having a right to vote
• A member or members holding shares in the company conferring a right to vote, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all shares conferring that right.

Proxies

Any member of the company who is entitled to vote at a general meeting of the company can appoint a proxy. A proxy is a person nominated by the member to attend the meeting and to exercise the member’s vote on their behalf. A proxy is also entitled to speak at the meeting on behalf of the member.

Under the standard form articles (as set out in Table A), the following provisions apply to proxies:

• The proxy must be nominated in writing and the nomination signed by the member if on behalf of an individual
• If the proxy is nominated on behalf of a company, the appointment must be stamped with the company seal
• The appointment must be furnished to the company at least 48 hours prior to the meeting