This is a comprehensive guide to company meetings.
In this guide, you will learn
- Requisites of a Valid Company Meeting
- kinds of company meetings
- Voting rights in company meetings
- Resolutions in company meetings
Let’s get started
A company is an association of several persons.
Decisions are made according to the view of the majority.
Generally, the meetings of the company are mainly governed by the company’s legislation and the Articles of Association of a company.
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- Requisites of a Valid Company Meeting
- Types of company meetings
- Minutes of the company meetings
- Voting at company meetings
- Types of Resolutions in the company meetings
Requisites of a Valid Company Meeting
For a company meeting to be valid;
- It must be properly convened (notice),
- It must be legally constituted (Quorum)
- business at the meeting must be validly transacted (agenda).
Types of company meetings
Generally, there are three main kinds of company meetings namely; a Meeting of Shareholders/Members, a meeting of directors, and a meeting of creditors.
Under the meeting of shareholders, there are statutory meetings, Annual general meetings, extraordinary general meetings, and Class meetings while under the meeting of directors, there is a Meeting of the Board of Directors and a Meeting of committees of Directors.
Corporate Statutory Meetings
A statutory meeting is a general meeting of the company, which is held to provide an earlier opportunity for the members for discussing all matters relating to the formation of the company.
It is the first meeting of the shareholders of a public limited company.
Company Statutory Meeting will be held only once in the whole life of the company.
The following companies are not required to hold a statutory meeting.
- a private company;
- a company limited by guarantee having no share capital
- an unlimited liability company
Company Annual general meeting (AGM)
The annual general meeting is the type of company meeting which is required to be held by every company each year to discuss both ordinary and special business of the company.
The law requires it to be held within 18 months after the date of its incorporation of the company.
The next AGM should be held not more than 15 months from the first AGM.
Notice of Annual General Meeting
There must be notice of not less than 21 days for calling the meeting which must state the time and place of the meeting and be accompanied by;
- Annual Accounts of the company
- Director’s report
- Auditor’s report on the accounts
- For Companies with a share, capital should also state in the notice that a member is entitled to attend and vote at the meeting or is entitled to appoint proxies in his absence.
The AGM must be held on a working day during business hours at the registered office of the company.
Failure to conduct AGM
Section 133(4) & (7) of the Tanzania Company Act, provides that in case of default in holding an annual general meeting or in complying with any directions of the Registrar the company and every officer of the company who is in default shall be liable to a fine.
Corporate Extra Ordinary General Meeting
Extra Ordinary General Meeting refers to any meeting of the company which is not AGM, called for transacting some argent or special business which may not be postponed till next AGM.
Extra Ordinary General Meeting is always called by directors on their own or upon the requisition of the members.
An explanatory statement of the special business must also accompany the notice calling of the meeting which explains the interest of the members
Company Class Meeting
Class meetings are meetings that are held by the holder of a particular class of shares, e.g. preference shareholders. Such meetings are normally called when it is proposed to alter, vary or affect the right of that particular class of shares.
During the class meeting, members discuss the pro and cons of the proposal and vote accordingly.
The class meeting is held to pass a resolution that will bind only members of that class to attend and vote
Meeting Of the Board of Directors
A Meeting of the board of directors also known as a board meeting is the type of company meeting that aims at discussing and deciding all matters relating to the company and it is a policy for the management of the company.
The Meeting Of the Board of Directors is the most important meeting and the most frequently held meeting of the company.
Meeting of Committees of Directors
The Meeting of committees of directors is the type of meeting done by the committee which has been delegated powers of the directors in big companies.
By delegating their power to the committee fully board does not need to meet more frequently It can be ad hoc or standing committee and to be valid the article of Association must provide for the same.
Meeting of the Creditors
Meeting of the creditors refers to the type of company meeting held when a company proposes to make a scheme or arrangement with its creditors
This kind of meeting can be done when the company is on a running concern or in the event of winding up
It can be called where a company may enter into an arrangement with creditors with the sanction of the court for reconstruction or any arrangement with its creditors
Minutes of the company meetings
Companies must keep minutes of general meetings at the registered office for inspection by members.
Voting at company meetings
There are two methods of voting at company meetings, the first is by show of hands and the second is by poll.
Show of hands Vote
At company meetings show of hands, a vote can be by show of hands unless articles provide otherwise. Each member has just one vote regardless of the number of shares he has – hands are counted and the result is declared by the chairman. The result is conclusive once recorded in the minutes.
NB: Proxies cannot vote on a show of hands unless the Articles of association allow it.
Voting by Poll
Voting by poll is conducted when members demand it. A company cannot refuse a demand for a poll made by: – at least 5 members have the right to vote, or – any member/members representing one-tenth or more of the total voting rights. Members normally have one vote per share in a poll. Members are entitled to exercise their votes according to their own interests.
Types of Resolutions in the company meetings
In company meetings when a motion passed is called a resolution
There are two common types of resolutions that can be passed at a company meeting. The first is a special resolution and the second is an ordinary resolution
A special resolution is a type of resolution which Requires a vote of 75% of members present in person or by proxy, who are entitled to vote and do vote.
The meeting at which a special resolution is proposed must have had at least 21 days’ notice unless a shorter period was agreed by a majority in a number of members holding at least 95% of the shares.
Certain matters can only be decided by special resolution and the articles cannot provide to the contrary. A printed copy of the special resolution must be sent to Registrar within 15 days of it being passed.
An ordinary resolution is the type of resolution which is passed by a simple majority (at least 51 percent vote in favor) at any general meeting of the shareholders.
Difference between ordinary resolutions and special resolutions
- An ordinary resolution is that which is passed by a simple majority (at least 51 percent vote in favor) at any general meeting of the shareholders while A special resolution is one that is passed by at least three-fourths (3/4th) majority of the members voting on it at the General Meeting
- A previous notice for an ordinary resolution is not essential while A 21 days notice must have been given for the meeting in which a special resolution is passed.
- The ordinary resolution normally does not require filing with the registrar while a copy of the special resolution must be filed with the Registrar within 30 days of the date of its passing.
- An ordinary resolution is required to transact ordinary business while A special resolution is required to transact special business.