General Meetings and Resolutions

Part 4 – Corporate Governance

The requirements and formalities of the AGM are set out in Section 175.

There is an important new addition: a CLS need not hold an AGM in any year where all the members (who are entitled to attend and vote at an AGM) sign a written resolution. The resolution must state, among other things, that all of the financial statements which would have been laid before the AGM were received by each of the members. (Section 175(3))

An AGM or an EGM may be held outside the State. All the members must consent to this. If such a meeting is organised to take place outside the State, the company has a (new) duty to make all necessary arrangements to ensure that members can participate by technological means from the Republic of Ireland.

Also new is that an AGM or an EGM may be held in two or more venues as long as the technology is in place to allow members “a reasonable opportunity to participate.”

In a new clarity provision, the Act sets out what the business of the AGM should be at Section 186.

The way meetings are to be conducted will be well known to practitioners and can now be found at Section 187.

The minutes of proceedings of the company’s general meetings must be entered into minute books – the rules in relation to this aspect are set out in Section 199.

All general meetings apart from the AGM are to be known as EGMs. It is for the directors to convene them.

If there are not enough directors to form a quorum, any director of the company – or any member – may convene an EGM, sticking as closely as they can to the way the meeting would be organised if it were done in normal circumstances.

Section 178 deals with EGMs organised by members. The two main points are as follows:

1. If one or more members hold 50% or more of the paid up share capital, they have the right to convene EGMs.

2. If members with 10% or more of the company’s paid up share capital call on the directors to hold an EGM, the directors must do so.

The Court may convene a meeting of the company in certain circumstances. They are dealt with in Section 179.

If a company was run by a sole director, and that person has died, the section gives locus standi to the personal representatives.

Section 181 lists the persons who are entitled to notice of general meetings.

Only the persons mentioned in the section are entitled to notice of meetings.

The notice periods that must be adhered to, are set out in Section 182. They are: 21 days for an AGM; 21 days for an EGM called to pass a special resolution; 7 days for any other EGM.

Service of notice is deemed to be received 24 hours after it is posted; that is new.

No general meeting can proceed without a quorum. Unless the company’s constitution provides otherwise, two members of a company present in person at a general meeting (or by proxy) shall be a quorum.

Section 182 states that a quorum must be present within 15 minutes of the appointed start-time for the meeting. If there isn’t a quorum present by that time, the meeting is dissolved, if it was requisitioned by members. In all other circumstances, the meeting is adjourned to the same day, time and place the following week (or whenever the directors decide).

If at the adjourned meeting there is no quorum after half an hour, then whichever members are present will constitute a quorum.

The law on proxies can be found at Sections 183 and 184 (link). There are no changes from the law as it stands. The section simply incorporates various Model Regulations as well as parts of Section 136 of the 1963 Act.

If a body corporate is a member of a company, its directors may empower an “authorised person” to act as their representative at any meeting of the company.

This is not new. The only new part of the section is that the chairperson of the meeting may require an authorised person to produce evidence of his authority. The chairperson can only ask for what is reasonable in the circumstances. If the evidence isn’t produced, the authorised person can be excluded from the meeting.

The rules regarding votes of members are unchanged, briefly stated are as follows:

1. On a show of hands, no individual member has more than one vote.

2. On a poll every member has one vote per share.

3. Where a share is jointly held, the vote of a senior who tenders the vote is to be accepted.

4. A member of unsound mind may vote by his/her committee.

5. A member who has made an enduring power of attorney may vote by his donee of an enduring power of attorney.

6. The court may appoint a person to vote for a person of unsound mind in respect of whom the court has made an order.

7. The representatives of persons of unsound mind, those who have made an enduring power of attorney, and those of unsound mind in respect of whom the court made an order – each category of aforementioned person has speaking rights and may vote by proxy.

8. If a member has not paid up money owing from a call, that member is not entitled to vote.

9. Objections to the qualification of any voter can only be made at the meeting where the vote is being taken.

The rules surrounding the right to demand a poll will be familiar to practitioners. There is nothing new – what the Act does is re-enact Model Regulations and one statutory provision. The rules can be found here (Section 189) and here (Section 190).

Section 191 deals with resolutions. It is a re-enactment of Section 141 of the 1963 Act. The salient points are as follows:

1. The term “ordinary resolution” is defined, which is new.

2. The term “special resolution” is changed slightly (it is no longer defined by reference to the notice of the resolution).

3. Even if 21 days notice is not given, a special resolution may be passed if the majority of members are in favour. (Majority being 90% in nominal value of the shares or 90% of the total voting rights).

4. Any reference in documents created before 1 April 1964 to an “extraordinary resolution” is to be construed as a reference to a special resolution.

5. If a resolution is passed at an adjourned meeting, it cannot be back dated to the date when the meeting was originally scheduled (Section 192).

The basic rule on written resolutions is a re-enactment. A written resolution signed by all the relevant members is as valid as if the resolution had been passed at a general meeting.

One new aspect is that members may sign copies of the resolution rather than all have to sign the same document.

A resolution carried in this way is deemed to be passed on the day the last member to sign, signs it.

If the resolution is not signed on the same day, the signatories must send all the documents, which constitute the resolution, to the company. This must be done within 14 days of its passing. Documents can be sent by e-mail or faxed. Those documents are deemed to be the minutes of the meeting. The company then has 21 days to notify its members that the resolution was passed. These rules are new.

If the above rules are broken, that fact does not affect the resolution’s validity (this rule is new). However, if those rules are broken, officers may be faced with a €5,000 fine.

A written resolution is as valid and effective for all purposes as if the resolution had been passed at a general meeting.

A written resolution will be described as an ordinary resolution; it will be signed by members who make up 50% or more of the total voting rights; and all relevant members will have been sent the text of the resolution and an explanation of the purpose behind it.

While there are some new provisions, they mirror the requirements for unanimous written resolutions, regarding the need for signatories to send the documents they have signed to the company, and so on. They can be found in full in Section 194, with supplementary provisions at Section 195.

There are two in-built safeguards. First, all members must receive the resolution and an explanation of it. Second, the resolution passed in this way will be deemed to take effect either 7 or 21 days after it was passed (it depends whether the resolution is ordinary or special); this gives dissenting shareholders the time to approach the courts for relief.

Section 194 does not apply, where the question to be voted on concerns the removal of a director or auditor.

Single member companies do not, for the most part, need to hold general meetings.

A general meeting must be held in order to remove an auditor from office.

Section 196 – which deals with this area – is simply a re-enactment of an EU Regulation (S.I. No. 275 of 1994). The Section sets out the procedural formalities required by the general meetings of single member companies.

Section 197 is new. It applies the rules relating to meetings which are set out in the Act to class meetings. It also applies the provisions of the company’s constitution to class meetings.

Special resolutions must be forwarded to the CRO within 15 days of being passed. The same is true of some ordinary resolutions and some agreements – the list can be found here (Section 198(4)).

If a member wants a copy forwarded to him, he must pay €10. That fee has increased.

Resolutions converting share capital into stock, and stock into share capital, must be sent on to the CRO; this is new.

Failure to comply with the provisions of Section 198 can leave defaulting officers of the company, and the company itself, open to a €5,000 fine.