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Resolutions and Meetings
Frequently asked questions
- What does part 13 of the Companies Act 2006 do?
- What happens when multiple proxies attend a meeting where the voting is on a show of hands?
- What about existing companies whose articles provided for a Chairman's casting vote?
- What about new companies, formed since 1 October?
- Why have you abolished the AGM for private companies?
- Is the effect of sections 281(3) and 282 to abolish the chairman’s casting vote
- What happens if the meeting wants to amend a special resolution?
- Will you be issuing guidance about the effect of sections 152 and 323
- What must members do if they want an independent scrutiny of a poll?
- What rights do independent assessors have?
- Will the new Table A provide model articles for private companies about AGMs?
- Is a signature required to validate a resolution? If not, why not?
- What records must companies keep in respect of meetings and resolutions?
What does part 13 of the Companies Act 2006 do?
Part 13 of the Companies Act 2006 implements two general changes:
• it makes the current “elective” regime the default for private companies (for example, private companies will no longer need to “elect” to dispense with the Annual General Meeting (AGM): they will not be required to hold AGMs);
• it introduces new – simpler - procedures for decisions to be taken by written resolution by private companies. (There are additional requirements for public and quoted companies).
What happens when multiple proxies attend a meeting where the voting is on a show of hands?
There is a common law duty on the chairman to demand a poll on a vote if he considers that the outcome would be different from that reached on a show of hands. Many companies – particularly quoted companies – count all votes on a poll as a matter of practice. An appropriate requirement is usually set out in their articles. Some companies still allow meeting participants – whether members attending in person or by proxy – to demonstrate their feelings on a resolution through a show of hands. But that does not affect the count of the vote which is taken on a poll.
What about existing companies whose articles provided for a Chairman's casting vote?
The Fifth Commencement Order includes a saving provision (Schedule 5, paragraph 2(5)) for the Chairman’s casting vote to allow those companies who previously had such a provision in their articles to continue with it. The saving also allows companies who have removed such a provision since 1 October 2007 to revert to it, should they wish to.
What about new companies, formed since 1 October?
The chairman's casting vote is abolished. It is important to remember that this abolition applies to company meetings, not directors' meetings, where casting votes are still allowed. Companies requiring guidance on taking decisions at company meetings should seek legal advice.
Why have you abolished the AGM for private companies?
It has not been abolished. The Act brings the law up to date with current practice, recognizing that many small private companies do not hold an AGM. This does not mean that private companies cannot hold AGMs; just that the Bill does not provide for a statutory regime.
Is the effect of sections 281(3) and 282 to abolish the chairman’s casting vote
Yes. These sections have the effect of making void an ordinary resolution passed at a company meeting by use of a casting vote of the chairman.
What happens if the meeting wants to amend a special resolution?
Under case law, apart from minor grammatical corrections or clerical errors, the text of the resolution cannot be changed. This is an important distinction between special resolutions and ordinary resolutions.
Will you be issuing guidance about the effect of sections 152 and 323
The Institute of Chartered Secretaries and Administrators is coordinating work to develop guidance for new working practices under the Act. We will consider whether any legislative changes need to be made in due course.
What must members do if they want an independent scrutiny of a poll?
Members must make their request up to one week after the meeting at which the poll is taken.
What rights do independent assessors have?
First, there is a right to attend the meeting at which the poll or polls may be taken. Second, there is a right to be provided with information relating to the meeting. Independent assessors can exercise these rights only to the extent they consider necessary for the preparation of his report.
Will the new Table A provide model articles for private companies about AGMs?
No. The draft Model articles for private companies which were published last year did not include provisions relating to AGMs in order to keep them as straightforward as possible.
Is a signature required to validate a resolution? If not, why not?
No, where a record of a resolution is kept – whether a written resolution or otherwise – which purports to be signed by a director or company secretary, such record will suffice as evidence of the passing of the resolution. However, there is neither a requirement for the company to obtain a signature and keep such a record, nor to keep every copy of the resolution if signed by the members.
What records must companies keep in respect of meetings and resolutions?
All companies must maintain records comprising: copies of all resolutions passed otherwise than at general meeting (which includes all written resolutions) and minutes of all proceedings of general meetings. There is a penalty on every officer in default of non-compliance.