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Types Of Resolutions Passed At General Meetings

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Types Of Resolutions Passed At General MeetingsGeneral meetings are meetings of the shareholders of a company.  Decisions of the members at a general meeting are made by a resolution.

There are two types of general meetings:

  1. Annual general meetings (AGM); and

  2. Extraordinary general meetings (EGM).

The business usually conducted at an AGM is to receive and consider the financial statements, to re-elect directors, to declare any final dividend and to authorise the directors to fix the remuneration of the auditors. Any general meeting other than an AGM is an EGM.

Types Of Resolutions

All resolutions must be passed in accordance with the requirements of the Companies Acts and the articles of association.

Ordinary Resolutions

An ordinary resolution requires seven days clear notice to those entitled to attend and vote. It is passed by a simple majority of those voting, in person and by proxy, or of shares voted by way of a poll. Most standard business conducted at AGMs is carried out by an ordinary resolution.

Examples of other decisions passed by ordinary resolution are:

  • Renewing directors’ authority to allot shares;

  • Giving authority for a company to purchase its own shares; and

  • Increasing the authorised share capital of a company. 

Special Resolutions

A special resolution requires twenty-one days clear notice to those entitled to attend and vote. It is passed by a majority of not less than 75% of those voting, in person and by proxy, or of shares voted by way of a poll.

Examples of decisions passed by special resolution are:

  • Amendments to memorandum and articles of association;

  • Change in company name;

  • Reduction in share capital;

    1. Voluntary wind up of a company; and

    2. Varying of class rights attaching to classes of shares.

Extended Notice Resolutions

Certain ordinary resolutions require extended notice before they may be properly passed, such as:

  • To remove a director before his period of office expires or to appoint someone else in his place at a meeting at which he is removed;

  • To remove an auditor before his term of office expires, to appoint an auditor other than the retiring one, to fill a casual vacancy in the office of auditors or to provide expressly that a retiring auditor shall not be reappointed.

The extended notice procedure is as follows:

  • Notice must be given by a member to the company to propose this resolution not less than 28 days before the meeting at which it is to be proposed;

  • The company must give notice of the resolution to members at the same time as it gives notice of the meeting. The resolution should be set out in full in the notice of the meeting;

  • If the resolution proposes to remove a director or auditor, a copy of the extended notice must be sent to the director or auditor in question, who has the right to make written representations to the company and request their circulation to the members. If the company fails to circulate the representations it can be made to read them out at the meeting before the resolution is put to the members.

Filing Obligations

All special resolutions must be registered with the Companies Registration Office within 15 days of passing. Ordinary resolutions do not generally require registration, but there are some exceptions, for example, increasing the authorised share capital of a Company.

If a company fails to comply with the registration rules, the company and every officer of the company who is in default shall be liable to a fine.

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