Fifth Schedule to the 2001 Act
The provisions of the Fifth Schedule govern proceedings at shareholders’ meetings except where the constitution makes provision for non-mandatory matters (matters which are not specifically expressed in the Fifth Schedule to be “notwithstanding any contrary provision in any constitution adopted by the company”).
If the chairperson of the board is not present within 15 minutes of the commencement of the meeting, shareholders may choose one of themselves to be chairperson. This rule is subject to the constitution of the company.
Notice of Shareholders’ Meeting
Written notice of the time and place of a meeting must be given at least 14 days before the meeting. An “irregularity in a notice of a meeting” is waived if all the shareholders attend the meeting without protest, or if they agree to the waiver.
Methods of Holding Shareholders’ Meetings
Companies may, unless their constitutions insist on physical meetings, have meetings by telephone conference or audio-visual link.
Quorum for Shareholders’ Meetings
Subject to the constitution of the company, there will be a quorum if enough shareholders or their proxies are present or have cast postal votes. Between them, they must be able to exercise a majority of the votes to be cast.
If a quorum is not present within 30 minutes of the appointed meeting time and the meeting was called by the shareholders, the meeting is dissolved. In other cases, if a quorum is not present within 30 minutes, the meeting is adjourned for one week.
A declaration by the chairperson of the meeting that a resolution is carried by the requisite majority is conclusive evidence of this unless a poll is demanded by shareholders.
As with the current law, a shareholder may exercise the right to vote in person or by proxy. A proxy is entitled to be heard at a meeting of shareholders as if the proxy were the shareholder. Note should be taken of the mandatory provisions that proxies must be deposited at a specified time before the start of the meeting, not earlier than 24 hours. This is a departure from Table A of the 1984 Act which provided for 48 hours.
The 2001 Act introduces a new regime where a shareholder may exercise the right to vote at a meeting by casting a postal vote as long as it is not debarred by the constitution.
Minutes of Shareholders’ Meetings
The board must ensure minutes are kept of all proceedings at meetings. Meetings which have been signed correct by the chairperson will be evidence of the proceedings.
Shareholder Proposals at Shareholders’ Meetings
A shareholder may give the board written notice of a matter he or she proposes to raise at the next meeting.
The notice must be received not less than seven days (or such other period, not exceeding 28 days, as may be specified in the constitution) before the last day notice of the meeting is required to be given by the board.
The board must give both the notice of a shareholder’s proposal and the notice of meeting to the shareholders. If the directors “intend” shareholders to vote on the proposal by proxy or postal vote, they must give the proposing shareholder the right to include a statement of no more than 1000 words in support of the proposal, together with the name and address of the proposing shareholder.
If the proposal is received outside the 28 day time limit, the proposing shareholder must meet the company’s costs in giving notice of the proposal and (if applicable) in giving the proposing shareholder’s statement in support. This limits access to the procedure by a “small shareholder” in a listed company, where the cost to the company could be significant.
The board is not required to include defamatory, frivolous or vexatious statements.
Corporations May Act by Representatives
A body corporate which is a shareholder is entitled to appoint a representative to attend a meeting on its behalf in the same way it could appoint a proxy.
Lost of Voting Rights If Calls Unpaid
Subject to the constitution of a company, if a sum due to a company for a share has not been paid, the share may not be voted at a shareholders’ meeting other than a meeting of an “interest group”. (Note that no definition is given of what is an “interest group” – a significant lacuna in the 2001 Act).
Except as provided in the Fifth Schedule, and subject to the constitution of the company, a shareholders’ meeting may regulate its own procedure.
Interest Group Meetings
A company is prohibited from taking action affecting certain rights attached to shares unless the action has been approved by a special resolution of each interest group.