3.1.3.Shareholders’ Meetings

Company law dictates that certain business decisions concerning a company need shareholder approval. In particular, shareholders’ meetings are required when major changes to the company are being proposed. Proposals for such changes are put to a shareholders’ meeting in the form of resolutions. Shareholders’ meetings can be attended by the company’s directors as well as by its shareholders. However, only shareholders have the right to vote. (It is possible to be a director without being a shareholder).

A company’s annual general meeting (AGM) is a type of shareholders’ meeting. Other shareholders’ meetings are known as extraordinary general meetings (EGMs). Twenty-one days’ notice is normally required to be provided to the shareholders before an AGM can be validly held, 14 days’ notice being required for an EGM. A vote on a proposed resolution is usually taken initially by ‘a show of hands’. In the course of such a vote each shareholder (otherwise known as a member of the company) normally has one vote, irrespective of the number of shares s/he possesses. 0nce the result of the vote on ‘a show of hands’ is declared, any member may demand what is known as a ‘poll’.

If a poll is held votes are then counted differentfy. Rather than each member having one vote regardless of his or her shareholding, each member has one vote for each share s/he holds. The chairman of the company will usually have a casting vote in the event that the number of votes are the same for and against a resolution, in order to enable such a deadlock to be broken. Shareholders’ meetings are usually called by the board.

Types of resolutions

The most common types of resolutions proposed at company meetings are :

1. Ordinary Resolution (OR) ─ requires a simple bare majority (i.e. 50% +1 of votes cast) to be passed. Usual notice required to be provided to members of a proposed ordinary resolution is 14 days.

2. Special Resolution (SR) ─ requires 75% of votes cast. Usual notice requirement is 21 days. (Note that this means therefore that if an SR is being proposed at an EGM then the required notice for the EGM will normally be 21 days rather than 14 days.)

Assignments

I. Memorize the following words and phrases from the text:

poll	опитування громадської думки; підрахунок голосів, результат голосування
casting vote	вирішальний голос
deadlock	тупик; безвихідне становище
to break the deadlock	вийти з тупика

ІІ.Continuing to act as lawyer, you are now asked to prepare the documentation required in order to convene the company’s first shareholders’ meeting. Remember that the company requires to achieve two specific objectives in the course of that meeting:

• To appoint David Kent of 4 Kensington Palace Gardens, London, W2 4AJ (date of birth 4^th of April 1969) to the board of directors.

• To change the name of the company from Golden Tours to Premium Tours Limited.

The steps now required are therefore as follows:

Step 1. Call the first shareholders’ meeting

Step 2. Prepare the minutes of the first shareholders’ meeting

Step 3. Prepare post-meeting documentation

III.Complete the following notice of the shareholders meeting (EGM), filling in the blanks by selecting the appropriate words from the list below:.

resolutions, convened, passing, vote, Notice, for the purpose of, member, appointed, special, Premium Tours.

COMPANY NUMBER 3467609

NOTICE OF EXTRAORDINARY GENERAL MEETING

COMPANIES ACT 1985

COMPANY LIMITED BY SHARES