COMPANY LAW BAB 2202/LAW 2034

MEETINGS

SUNWAY UNIVERSITY

Meetings

SUNWAY UNIVERSITY

Types of Meetings

GENERAL MEETING Definition: A general meeting is a

meeting of the members of the company.

Example: Where the employer and the employees of the company come together todiscuss general issues about the company.

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Types of MeetingsSTATUTORY MEETINGSec 142 CA 1965 Not less than one month & not more than 3 months after the date

the public limited company commences its business, the company must hold a statutory meeting once in the life of the company.

Members are free to discuss any matter relating to the formation of the company.

A copy of the statutory report must be sent to the member 7 days before thecommencement of the meeting. The Report must be certified by 2 directors, it must state the matter specifically - S 142(3) CA 1965.

Resolutions may be passed at the meeting but must be in accordance to AA. Failure to comply with S142 CA 1965 would render every officer guilty of the offence and it will be a ground for compulsory winding up.

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Types of MeetingsANNUAL GENERAL MEETING The company shall hold the First AGM within 18

months of its incorporation. It has been held that it is an obligation to hold an

annual general meeting every year and the period between the first and the second AGM must not be more than 15 months.

These obligations are separate legal obligations. Every officer in default will be liable to a fine in the event where there is a failure to comply. Section 143 CA 1965. (Smedley v Registrar of the Stock Companies).

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Types of Meetings

ANNUAL GENERAL MEETING The penalty for failing to hold an AGM is

not limited to a fine of RM5,000.00 but includes a default penalty, i.e. if the offence continues after conviction they will be liable to an additional penalty of not more than RM200.00 for each day during which the offence continues – S143 (4) CA 1965. Hence the AGM must be held even after payment of fine is made.

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Types of Meetings

ANNUAL GENERAL MEETING When the AGM has been called, the

directors have NO Power to postpone it. In the event that the director wants to postpone it he must have the authority to do so. The authority or the power must come expressly set out in the Article of Association- Sec 145A CA 1965.

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Types of MeetingsNATURE OF BUSINESS AT THE AGMWhat are the items that must be presented in an

AGM asrequired by Article 46, Sch 4 CA 1965 which is

incorporated in Table A? The declaration of dividend; The consideration of accounts; Balance sheets and the reports of directors and

auditors; The election of directors in place of those retiring;

and The appointment, and the fixing of remuneration,

of the auditors. Article 46 identifies these as ordinary business of

the company.

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Types of Meetings

S 169(1) the accounts are prepared before the AGM

S 172(2) – appointment of an auditors

S 129(6) – re appointment of directors

S 132D – issue of shares to be approved

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Types of Meetings

EXTRAORDINARY GENERAL MEETING To transact special meeting or to pass

special resolutions which are urgent & cannot wait for the next AGM.

Art 46 Table A Removal of auditors prior to AGM Removal of directors Passing of special resolution/ ordinary

resolution. Something that must be very urgent.

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Types of Meetings

AUDIT COMMITTEE MEETINGKLSE Listing Requirements requires every public listed company to appoint an audit committee. Audit committee

must have written terms with references to its authority and duties.

The Securities Commission (SC) requires the audit committee to monitor intercompany transactions between companies and

any related parties outside the group, and ensure that the

directors disclose them annually via annual report. All the transactions

must be transparent and not favourable to the directors.

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Notice of Meetings

S 148(1) – every member is entitled to attend and speak at meetings.

S 174(7) – auditor is also entitled S 145(2) 14 days notice is given

except for meetings to pass a special resolution i.e. 21 days - s 152(1)

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Notice of Meetings

S 145(3)(a) – shorter notice for AGM by unanimous consent of all the members

S 145(3)(b) – for GMs, by 95% nominal value of voting shares/rights

S 145(4) – served according to the article – Table A article 108: by hand or to registered/supplied address

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Notice of Meetings

A defect of notice does not invalidate a meeting, unless substantial injustice is caused– David Lau Tai Bek v Lau Ek Ching [1972] 1 MLJ 217; Chang Ching Chuen v Aik Ming [1995] 2 MLJ 43 & 770: if members vote unanimously, the resolution is valid as they are taken to have waived the irregularities.

The court’s power to validate improperly called meetings cannot & will not be exercised where there is injustice to members who did not attend – First Nominee v New Kok Ann Realty [1983] 2 MLJ 76

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Contents ofNotice

Notice is to be accompanied by circulars or statements setting out the proposed business of the meeting

S 151 – members may propose resolutions/circular accompanied at their expenses

S 151(2) – at 5% voting rights/ 100 members

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Contents ofNotice If a material fact is not disclosed in the

notice, resolution passed may be invalidated as against a member who did not attend

Tiessen v Henderson [1899] 1 Ch 861: Directors’ benefit to a scheme of reconstruction not disclosed in the notice. The absent shareholder is not bound by the resolution

Hup Seng v Chin Yin [1962] MLJ 371: the notice by the requisitionists did not set out the draft resolution; therefore void

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Special noticeSpecial notice is required from

members if the resolution proposes: to remove directors (s 128); or the auditors prematurely (s 172(4)).

S 153 – notice is given 28 days before the meeting for the accused (natural justice)

14 days for other members

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Quorum

S 147(1)(a) – 2 members unless article provides otherwise

Re Salvage Engineers [1962] MLJ 438: the meeting was held improper when a resolution to wind up the company was passed by a member who was also a proxy.

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Quorum

The lack of a quorum does not invalidate the meeting unless the court thinks substantial injustice has been caused – s 355

Eg Sarawak Building Supplies v Director of Forests [1991] 1 MLJ 211: solicitors appointed pursuant to resolutions made without a quorum (held invalid) were discharged

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Other Matters

S147(1)(b) – a chairman may be elected among the members present

S 146(1)(a) – a show of hand may suffice without a poll

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Other Matters

Resolutions: ordinary & special; where special is normally specified statutorily eg M&A’s amendment, capital reduction etc.

152(8) –but may be provided by the article for other matters

Ordinary – simple majority (present & voting)

Special – ¾ majority (present & voting) with 21 days’ notice (s 152(1))

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Other Matters

S 152(4) – a poll counts the votes that each member is entitled (the votes cast by written ballot)

Any abstention will not be counted. Short notice for a special resolution may be

allowed if 95% agreed (nominal value of voting shares /rights held): s 152(2)

Resolution passed is not a contract: Lam Eng Rubber Factory v Lim Beng Yew [1994] 3 MLJ 405

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Other Matters

S 148(1) all members are entitled to vote

S 148(2) preference shareholders may not able to vote

S 147(1)(c) (ii) each share carries 1 vote

S 55 each equity share of plc may only have 1 vote

S 147 (1)(d) also 1 vote each for company without share capital

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Other Matters

S 147(1)(c) on a show of hand – each member is entitled to 1 vote

On a poll – depends on the shareholding S 146(1)(b) A poll may be demanded by: any 5

member or more; or holders of 10% voting rights/ paid up shares

S 149(1)(b) a proxy must be a member unless he is an advocate, auditor or anyone approved by the Registrar