Company Law Reform Bill [HL]

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

Company Law Reform Bill [HL]

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 3 — Resolutions at meetings
140

Electronic communications
316
Sending documents relating to meetings etc in electronic form
(1)
Where a company has given an electronic address in a notice calling a meeting,
it is deemed to have agreed that any document or information relating to
proceedings at the meeting may be sent by electronic means to that address
5
(subject to any conditions or limitations specified in the notice).
(2)
Where a company has given an electronic address—
(a)
in an instrument of proxy sent out by the company in relation to the
meeting, or
(b)
in an invitation to appoint a proxy issued by the company in relation to
10
the meeting,

it is deemed to have agreed that any document or information relating to
proxies for that meeting may be sent by electronic means to that address
(subject to any conditions or limitations specified in the notice).
(3)
In subsection (2), documents relating to proxies include—
15
(a)
the appointment of a proxy in relation to a meeting,
(b)
any document necessary to show the validity of, or otherwise relating
to, the appointment of a proxy, and
(c)
notice of the termination of the authority of a proxy.
(4)
In this section “electronic address” means any address or number used for the
20
purposes of sending or receiving documents or information by electronic
means.
Application to class meetings
317
Application to class meetings
(1)
The provisions of this Chapter apply (with necessary modifications) in relation
25
to a meeting of holders of a class of shares as they apply in relation to a general
meeting.
This is subject to subsections (2) and (3).
(2)
The following provisions of this Chapter do not apply in relation to a meeting
of holders of a class of shares—
30
(a)
sections 286 to 288 (members’ power to require directors to call general
meeting), and
(b)
section 289 (power of court to order meeting).
(3)
The following provisions (in addition to those mentioned in subsection (2)) do
not apply in relation to a meeting in connection with the variation of rights
35
attached to a class of shares (a “variation of class rights meeting”)—
(a)
section 301 (quorum), and
(b)
section 304 (right to demand a poll).
(4)
The quorum for a variation of class rights meeting is—
(a)
for a meeting other than an adjourned meeting, two persons present
40
holding at least one-third in nominal value of the issued shares of the
class in question (excluding any shares of that class held as treasury
shares);

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 3 — Resolutions at meetings
141

(b)
for an adjourned meeting, one person present holding shares of the
class in question.
(5)
For the purposes of subsection (4), where a person is present by proxy or
proxies, he is treated as holding only the shares in respect of which those
proxies are authorised to exercise voting rights.
5
(6)
At a variation of class rights meeting, any holder of shares of the class in
question present may demand a poll.
(7)
For the purposes of this section—
(a)
any alteration of a provision contained in a company’s articles for the
variation of the rights attached to a class of shares, or the insertion of
10
any such provision into the articles, is itself to be treated as a variation
of those rights, and
(b)
references to the variation of rights attached to a class of shares include
references to their abrogation.
318
Application to class meetings: companies without a share capital
15
(1)
The provisions of this Chapter apply (with necessary modifications) in relation
to a meeting of a class of members of a company without a share capital as they
apply in relation to a general meeting.
This is subject to subsections (2) and (3).
(2)
The following provisions of this Chapter do not apply in relation to a meeting
20
of a class of members—
(a)
sections 286 to 288 (members’ power to require directors to call general
meeting), and
(b)
section 289 (power of court to order meeting).
(3)
The following provisions (in addition to those mentioned in subsection (2)) do
25
not apply in relation to a meeting in connection with the variation of the rights
of a class of members (a “variation of class rights meeting”)—
(a)
section 301 (quorum), and
(b)
section 304 (right to demand a poll).
(4)
The quorum for a variation of class rights meeting is—
30
(a)
for a meeting other than an adjourned meeting, two members of the
class present (in person or by proxy) who together represent at least
one-third of the voting rights of the class;
(b)
for an adjourned meeting, one member of the class present (in person
or by proxy).
35
(5)
At a variation of class rights meeting, any member present (in person or by
proxy) may demand a poll.
(6)
For the purposes of this section—
(a)
any alteration of a provision contained in a company’s articles for the
variation of the rights of a class of members, or the insertion of any such
40
provision into the articles, is itself to be treated as a variation of those
rights, and
(b)
references to the variation of rights of a class of members include
references to their abrogation.

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 4 — Public companies: additional requirements for AGMs
142

Chapter 4
Public companies: additional requirements for AGMs
319
Public companies: annual general meeting
(1)
Every public company must hold a general meeting as its annual general
meeting in each period of 6 months beginning with the day following its
5
accounting reference date (in addition to any other meetings held during that
period).
(2)
A company that fails to comply with subsection (1) as a result of giving notice
under section 374 (alteration of accounting reference date)—
(a)
specifying a new accounting reference date, and
10
(b)
stating that the current accounting reference period or the previous
accounting reference period is to be shortened,

shall be treated as if it had complied with subsection (1) if it holds a general
meeting as its annual general meeting within 3 months of giving that notice.
(3)
If a company fails to comply with subsection (1), an offence is committed by
15
every officer of the company who is in default.
(4)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
20
320
Public companies: notice of AGM
(1)
A notice calling an annual general meeting of a public company must state that
the meeting is an annual general meeting.
(2)
An annual general meeting may be called by shorter notice than that required
by section 290(2) or by the company’s articles (as the case may be), if all the
25
members entitled to attend and vote at the meeting agree to the shorter notice.
321
Public companies: members’ power to require circulation of resolutions for
AGMs
(1)
The members of a public company may require the company to give, to
members of the company entitled to receive notice of the next annual general
30
meeting, notice of a resolution which may properly be moved and is intended
to be moved at that meeting.
(2)
A resolution may properly be moved at an annual general meeting unless—
(a)
it would, if passed, be ineffective (whether by reason of inconsistency
with any enactment or the company’s constitution or otherwise),
35
(b)
it is defamatory of any person, or
(c)
it is frivolous or vexatious.
(3)
A company is required to give notice of a resolution once it has received
requests that it do so from—
(a)
members representing at least 5% of the total voting rights of all the
40
members who have a right to vote on the resolution at the annual
general meeting to which the requests relate (excluding any voting

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 4 — Public companies: additional requirements for AGMs
143

rights attached to any shares in the company held as treasury shares),
or
(b)
at least 100 members who have a right to vote on the resolution at the
annual general meeting to which the requests relate and hold shares in
the company on which there has been paid up an average sum, per
5
member, of at least £100.
(4)
A request—
(a)
may be in hard copy form or in electronic form,
(b)
must identify the resolution of which notice is to be given,
(c)
must be authenticated by the person or persons making it, and
10
(d)
must be received by the company not later than—
(i)
6 weeks before the annual general meeting to which the
requests relate, or
(ii)
if later, the time at which notice is given of that meeting.
322
Public companies: company’s duty to circulate members’ resolutions for
15
AGMs
(1)
A company that is required under section 321 to give notice of a resolution
must send a copy of it to each member of the company entitled to receive notice
of the annual general meeting—
(a)
in the same manner as notice of the meeting, and
20
(b)
at the same time as, or as soon as reasonably practicable after, it gives
notice of the meeting.
(2)
Subsection (1) has effect subject to section 323(2) (deposit or tender of sum in
respect of expenses of circulation).
(3)
The business which may be dealt with at an annual general meeting includes a
25
resolution of which notice is given in accordance with this section.
(4)
In the event of default in complying with this section, an offence is committed
by every officer of the company who is in default.
(5)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
30
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
323
Public companies: expenses of circulating members’ resolutions for AGM
(1)
The expenses of the company in complying with section 322 need not be paid
by the members who requested the circulation of the resolution if requests
35
sufficient to require the company to circulate it are received before the end of
the financial year preceding the meeting.
(2)
Otherwise—
(a)
the expenses of the company in complying with that section must be
paid by the members who requested the circulation of the resolution
40
unless the company resolves otherwise, and
(b)
unless the company has previously so resolved, it is not bound to
comply with that section unless there is deposited with or tendered to
it, not later than—

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies
144

(i)
six weeks before the annual general meeting to which the
requests relate, or
(ii)
if later, the time at which notice is given of that meeting,

a sum reasonably sufficient to meet its expenses in complying with that
section.
5
Chapter 5
Additional requirements for quoted companies
Website publication of poll results
324
Results of poll to be made available on website
(1)
Where a poll is taken at a general meeting of a quoted company, the company
10
must ensure that the following information is made available on a website—
(a)
the date of the meeting,
(b)
the text of the resolution or, as the case may be, a description of the
subject matter of the poll,
(c)
the number of votes cast in favour, and
15
(d)
the number of votes cast against.
(2)
The provisions of section 336 (requirements as to website availability) apply.
(3)
In the event of default in complying with this section (or with the requirements
of section 336 as it applies for the purposes of this section), an offence is
committed by every officer of the company who is in default.
20
(4)
A person guilty of an offence under subsection (3) is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.
(5)
Failure to comply with this section (or the requirements of section 336) does not
affect the validity of—
(a)
the poll, or
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(b)
the resolution or other business (if passed or agreed to) to which the
poll relates.
(6)
This section only applies to polls taken after this section comes into force.
Independent report on poll
325
Members’ power to require independent report on poll
30
(1)
The members of a quoted company may require the directors to obtain an
independent report on any poll taken, or to be taken, at a general meeting of
the company.
(2)
The directors are required to obtain an independent report if they receive
requests to do so from—
35
(a)
members representing not less than 5% of the total voting rights of all
the members who have a right to vote on the matter to which the poll
relates (excluding any voting rights attached to any shares in the
company held as treasury shares), or

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies
145

(b)
not less than 100 members who have a right to vote on the matter to
which the poll relates and hold shares in the company on which there
has been paid up an average sum, per member, of not less than £100.
(3)
Where the requests relate to more than one poll, subsection (2) must be
satisfied in relation to each of them.
5
(4)
A request—
(a)
may be in hard copy form or in electronic form,
(b)
must identify the poll or polls to which it relates,
(c)
must be authenticated by the person or persons making it, and
(d)
must be received by the company not later than one week after the date
10
on which the poll is taken.
326
Appointment of independent assessor
(1)
Directors who are required under section 325 to obtain an independent report
on a poll or polls must appoint a person they consider to be appropriate (an
“independent assessor”) to prepare a report for the company on it or them.
15
(2)
The appointment must be made within one week after the company being
required to obtain the report.
(3)
The directors must not appoint a person who—
(a)
does not meet the independence requirement in section 327, or
(b)
has another role in relation to any poll on which he is to report
20
(including, in particular, a role in connection with collecting or
counting votes or with the appointment of proxies).
(4)
In the event of default in complying with this section, an offence is committed
by every officer of the company who is in default.
(5)
A person guilty of an offence under this section is liable on summary
25
conviction to a fine not exceeding level 5 on the standard scale.
(6)
If at the meeting no poll on which a report is required is taken—
(a)
the directors are not required to obtain a report from the independent
assessor, and
(b)
his appointment ceases (but without prejudice to any right to be paid
30
for work done before the appointment ceased).
327
Independence requirement
(1)
A person may not be appointed as an independent assessor—
(a)
if he is—
(i)
an officer or employee of the company, or
35
(ii)
a partner or employee of such a person, or a partnership of
which such a person is a partner;
(b)
if he is—
(i)
an officer or employee of an associated undertaking of the
company, or
40
(ii)
a partner or employee of such a person, or a partnership of
which such a person is a partner;
(c)
if there exists between—

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies
146

(i)
the person or an associate of his, and
(ii)
the company or an associated undertaking of the company,

a connection of any such description as may be specified by regulations
made by the Secretary of State.
(2)
An auditor of the company is not regarded as an officer or employee of the
5
company for this purpose.
(3)
In this section—
“associated undertaking” means—
(a)
a parent undertaking or subsidiary undertaking of the
company, or
10
(b)
a subsidiary undertaking of a parent undertaking of the
company; and
“associate” has the meaning given by section 328.
(4)
Regulations under this section are subject to negative resolution procedure.
328
Meaning of “associate”
15
(1)
This section defines “associate” for the purposes of section 327 (independence
requirement).
(2)
In relation to an individual, “associate” means—
(a)
that individual’s spouse or civil partner or minor child or step-child,
(b)
any body corporate of which that individual is a director, and
20
(c)
any employee or partner of that individual.
(3)
In relation to a body corporate, “associate” means—
(a)
any body corporate of which that body is a director,
(b)
any body corporate in the same group as that body, and
(c)
any employee or partner of that body or of any body corporate in the
25
same group.
(4)
In relation to a partnership that is a legal person under the law by which it is
governed, “associate” means—
(a)
any body corporate of which that partnership is a director,
(b)
any employee of or partner in that partnership, and
30
(c)
any person who is an associate of a partner in that partnership.
(5)
In relation to a partnership that is not a legal person under the law by which it
is governed, “associate” means any person who is an associate of any of the
partners.
(6)
In this section, in relation to a limited liability partnership, for “director” read
35
“member”.
329
Effect of appointment of a partnership
(1)
This section applies where a partnership that is not a legal person under the
law by which it is governed is appointed as an independent assessor.
(2)
Unless a contrary intention appears, the appointment is of the partnership as
40
such and not of the partners.