Annual general meetings are usually held every financial year. The Companies Act 1973 prescribes certain matters which must be dealt with at the AGM (e.g. the review and discussion of the annual financial statements of the company for that financial year and appointment/removal of auditors).
Ordinary general meetings, on the other hand, are called for either by the members or by the directors for a specific purpose, provided that the members must be informed of the purpose for the meeting at a prescribed time prior to it being held.
The procedure in calling and holding members’ meetings is unique to each company. However, below is the typical procedure one would find in a company:
1. Requisitioning of members meeting
The default position in the Act states that any two or more members holding not less than 1/10th of the company’s issued share capital may requisition a members’ meeting. In most company’s Articles, the power to call members’ meeting is usually the exclusive right of the directors.
However, the Act protects the right of members to requisition a members’ meeting. Once requisitioned, the directors are obliged to call the meeting. The Act allows the Registrar of Company’s or the Court to call a members’ meeting in limited situations.
2. Notice of meeting
Notice of the meeting must be given to members of the date, place and purpose of the members’ meeting.
The notice must be given at least 21 days (in the case of an annual general meeting or a meeting where a special resolution is to be decided on) or 14 days (in the case of an ordinary general meeting) prior to the proposed holding of the meeting.
Notice is usually sent to members’ by mail at their registered address with the company. However, the Act also allows the company to advertise notice of the members’ meeting in the Government Gazette or the appropriate newspapers.
The notice must contain all relevant details relating to the meeting including the time, place, purpose, resolutions to be tabled and all relevant background information/facts relating to such resolutions.
3. Quorum and Adjournments
In order to conduct business at a members’ meeting, a minimum number of members must be present. This number is correctly called the quorum of members. Where a quorum is not present, the meeting is adjourned to a later time or date to allow for more members to attend.
If at the adjourned meeting a quorum is still not present, those members present will constitute a quorum. A meeting may also be adjourned if a simple majority of members present demand such meeting to be adjourned. Similarly, the chairman of the members’ meeting may adjourn the meeting in circumstances where the meeting cannot be effectively held.
However, if the meeting is adjourned by the chairman against the wishes of the members, the members are empowered to agree amongst themselves to appoint a new chairman, disregard the adjournment and continue the meeting.
If the members demand an adjournment, the chairman is obliged to adjourn the meeting and, no later than three days after the adjournment, rearrange the meeting for a day no sooner than seven days and not later than 21 days after the date of the meeting was originally held.
4. Holding of and voting at the meeting
The members’ meeting is run by a chairman either elected specifically for that meeting, or appointed by the members to chair meetings in general.
The chairman will present the business to be discussed at the meeting. Once a matter is presented, any member wishing to voice his opinion on the matter must be heard at the meeting and it is the chairman’s obligation to ensure that such member is given an opportunity to be heard.
Once a matter has been presented and discussed, the members are required to vote on the resolution in respect of that matter. In terms of the Act, matters are, by default, decided by show of hands. If the matter is particularly sensitive, or the result of voting by hands cannot be easily determined, the matter can be referred to a poll or voting by secret ballot.
In order to be successfully passed, a resolution must be approved by a minimum number of shareholders. The default position is that ordinary resolutions must be passed by an ordinary majority of members (50% of members plus one member present and voting at the meeting) and special resolutions must be passed by a special majority of members (75% of members present and voting at the meeting).
After all matters have been discussed and the relevant resolutions have been voted on, the chairman will call a close to the meeting.
5. Minutes and copies of special resolutions
The company is obliged to keep minutes of every members’ meeting in a minute book at the company’s registered address. This minute book must be open for inspection by members for at least two hours every day during business hours.
The company may not refuse any member access to the minute book. In addition, every special resolution passed by the company and the notice convening the meeting to discuss such resolution is required to be lodged with CIPRO within one month of being passed. Every member may, on application to CIPRO and on payment of a small fee, inspect any special resolution passed by the company and lodged with CIPRO.
