LML 4806 company-law-summary.

COMPANY LAW SUMMARY: MEETINGS Notice of meetings: S62: 1. Must be in writing. 2. Include the date, time and place of the meeting. 3. Where the company set a record date for a meeting 4. The notice should explain the general purpose of the meeting 5. In a public company and a non-profit company that has voting members, notice of a shareholder meeting should be given 15 business days before the date of the meeting. In any other company the notice, convening the meeting must be sent ten business days before the date of the meeting. The provisions of the memorandum of Incorporation may prescribe longer minimum notice. 6. A copy of any proposed resolution received by the company, which is to be considered at the meeting, must accompany the notice convening the meeting. 7. The notice must indicate the percentage of voting rights required for the resolution to be adopted. 8. A notice convening the AGM of a company must contain a summary of the financial statements that will be tabled at the meeting. 9. A notice convening a meeting must contain a statement that a shareholder is entitled to appoint a proxy 10. The notice should indicate that meeting participants will be required to provide satisfactory proof of identity at the meeting. Where the company has failed to give proper notice of the meeting or there has been a defect in the giving of the notice, the meeting may proceed if the persons who are entitled to vote in respect of each item on the agenda are present at the meeting and acknowledge actual receipt of the notice and agree to waive notice of the meeting or in the case of a material defect, ratify the defective notice. The term shareholder is used in respect of profit companies.The term member is used in respect of non profit companies. PROXY: A proxy is a person appointed to represent a shareholder at a meeting.  At common law: there was no right to appoint a person, speak and vote on behalf of another.  The companies Act allow a shareholder to appoint two or more proxies. Once appointed, a proxy will be allowed to attend, participate in, speak and vote at the shareholders’ meeting. Ingre v Maxwell the court held that there must be at least two persons present to constitute a valid meeting where one person is in attendance and holds the proxies of all other persons who were entitled to attend the meeting.  The appointment of a proxy must be in writing and signed by the shareholder appointing the proxy.  The appointment remains valid for one year after it was signed.  A proxy may delegate authority to act on behalf of the shareholder to another person. Downloaded by Lesego Tshabalala () lOMoARcPSD| CLS cc Company Law Summary Critical Law Studies CC © 2  A copy of the proxy appointment form must be delivered to the company prior to the proxy exercising any rights of the shareholder at the shareholders meeting.  The shareholder who appoints the proxy has the right to revoke the proxies’ appointment at any time by cancelling it in writing, or making a later inconsistent appointment of a proxy and delivering a copy of the revocation instrument to the proxy and the company. Demand to convene a shareholders’ meeting The board or any other person specified in the company’s Memorandum, may call a shareholders’ meeting at any time A meeting of shareholders must be convened if one or more written and signed demands for such a meeting are delivered to the company: 1. A demand must specify the purpose of the meeting. 2. Must be signed by the holders of at least 10% of the voting rights 3. The memorandum of Incorporation of a company may specify a lower percentage than 10%. 4. A company, or any shareholder of the company, may apply to a court for an order setting aside a demand for a meeting on the grounds that the demand is frivolous, or because it calls for a meeting for not other purpose than to re-consider a matter that has already been decided by the shareholders, or is vexatious. 5. A shareholder who submitted a demand for a meeting may withdraw the demand before the start of the meeting. Shareholders acting other than at a meeting Act without holding a meeting B4: don’t need to hold an AGM if all the members entitled to attend consent in writing Common law: unanimous assent: Some decisions are valid without having a meeting if all the members know of the facts and have assented to it Gohlke: shareholders appointed a director without a formal meeting if they have unanimous assent In re Deuomatic: approval of directors salary by the 2 directors who had majority of the voting rights in the co could be done by unanimous assent 1973 Act: all members entitled to attend the meeting must consent in writing for a resolution to be passed without a formal meeting. Such decision is made as if a formal meeting was held 2008 Act: resolutions can be adopted in writing without a formal meeting – if its done by the required majority – it will be as if the meeting was held. BUT AGM cant be conducted in this way The rights must be exercised within 20 days of getting notice and members must return a written vote. Within 10 days of the adoption of the resolution = the company must deliver the results. Downloaded by Lesego Tshabalala () lOMoARcPSD| CLS cc Company Law Summary Critical Law Studies CC © 3 RECORD DATE The term "record date" is defined in section 1 of the 2008 Act as the "date established under section 59 on which a company determines the identity of its shareholders and their shareholdings for the purposes of this Act". The 2008 Act introduces new provisions enabling the board to set one or more appropriate record dates for determining which shareholders should: ◦ receive notice of a shareholders meeting, ◦ participate in and vote at a shareholders meeting, ◦ decide a matter by written consent ◦ exercise pre-emptive rights, ◦ receive a distribution, or ◦ be allotted or exercise other rights.