Clause 291: Manner in which notice to be given

529.     This clause should be read in conjunction with the general requirements for different types of companies in sending and supplying information as set out in Part 31 (Companies: Supplementary Provisions) and Schedules 6 and 7 (which respectively deal with communications by a company other than a traded company and communications by a traded company).

Clause 292: Publication of notice of meeting on website

530.     This clause contains some specific provisions on communications by means of a website and needs to be read with the general provisions on communications referred to above. The overall effect is similar to that of the website provisions in the current section 369 of the 1985 Act.

Clause 293: Persons entitled to receive notice of meetings

531.     This clause puts into statute part of article 38 of Table A. The new provision ensures that notice of meetings must be sent to all members, directors and any person entitled to a share as a consequence of the death or bankruptcy (or the equivalent in Scots insolvency law) of a member. The provision is subject to any enactment and to any provision in the articles. This means that a company may, for example, make provision in its articles to stop sending notice of meeting to members for whom the company no longer has a valid address.

Clause 294: Contents of notices of meetings

532.     This clause puts into statute another part of article 38 of Table A. The new provision ensures that the notice of meeting must include the time, date and place of the meeting and, subject to the articles, the general nature of the business to be conducted at the meeting.

Clause 295: Resolution requiring special notice

533.     This clause replaces section 379 of the 1985 Act setting out the requirements for special notice resolutions. It makes provision only in relation to resolutions passed at meetings. This is because the resolutions for which special notice is required are either resolutions that are not capable of being passed as written resolutions (in the case of clauses 154 (resolution to remove director) and 500 (resolution removing auditor for office)) or in relation to which written resolutions have their own special procedure (see clauses 504 (failure to re-appoint auditor: special procedure required for written resolution) and 505 (failure to re-appoint auditor: special notice required for resolution at general meeting)).

534.     There is no change from the existing law, whereby at least 28 days' notice must be given to the company of the intention to move a resolution requiring special notice. Where it is not practicable for the company to give members notice of such a resolution at the same time as it gives notice of the meeting at which the resolution is to be moved, the company must in future give at least 14 days' notice either by newspaper advertisement or by any other manner allowed by the articles.

Clause 296: Accidental failure to give notice of resolution or meeting

535.     This clause expands on article 39 of Table A. It contains the rule that an accidental failure to give notice of a resolution or a general meeting is generally disregarded. Under subsection (2), this rule can be altered by the articles in some but not all cases.

Members' statements

Clause 297: Members' power to require circulation of statements

536.     This clause, together with clause 298 (company's duty to circulate members statement), replaces sections 376 and 377 of the 1985 Act (to the extent that they relate to members' statements) and provides a right for members to require the company to circulate a statement of up to 1,000 words. The key policy change is that where the statement relates to a resolution or other matter to be dealt with at a public company's AGM and is received before the company's financial year-end, the shareholders are not required to cover the costs of circulating the statement. There are two other notable changes. The first is that the shares relied on to trigger the circulation of a statement must in each case carry rights to vote on the relevant resolution rather than just at the meeting. The second is that requests in electronic form are permitted.

Clause 298: Company's duty to circulate members' statement

537.     This clause replaces the remainder of sections 376 and 377 of the 1985 Act and specifies what the company is to do when it is required to circulate a members' statement. The statement must be circulated in the same manner as notice of the meeting and at the same time, or as soon as reasonably practicable, after the company gives notice of the meeting. Where the company fails to comply with the provisions of this clause an offence is committed by every officer of the company who is in default.

Clause 299: Expenses of circulating members' statement

538.     48. This clause provides that the expenses of complying with clause 298 (company's duty to circulate members' statement) need not be paid by the members if the meeting to which the request relates is a public company AGM and a sufficient number of requests are received before the company's year-end. Otherwise the company's expenses will have to be met by the members who requested the circulation of the statement unless the company resolves otherwise. In this case, the members requesting the statement must deposit a sum to cover the company's costs (unless the company has resolved otherwise)

Clause 300: Application not to circulate members' statement

539.     This clause replaces section 377(3) of the 1985 Act. It enables the court on application to relieve the company of an obligation to circulate a members' statement if in its opinion the right to require circulation is being abused.

Procedure at meetings

Clause 301: Quorum at meetings

540.     This clause replaces sections 370(4) and 370A of the 1985 Act. It sets a quorum for a meeting of one "qualifying person" in the case of a single member company and - as a default - two "qualifying persons" in any other case. Subsections (2) and (3) ensure that a member, corporate representative or proxy present at the meeting may all be "qualifying persons", but excludes the possibility of two or more corporate representatives or proxies of the same member comprising a quorum. Under the replaced provisions, proxies and corporate representatives do not count towards a quorum in companies with more than one member.

Clause 302: Chairman of meeting

541.     This clause reproduces the effect of section 370(5) of the 1985 Act and provides a default provision where the company's articles are silent to allow any member to be elected as chairman of a general meeting by a resolution of the company passed at the meeting.

Clause 303: Declaration by chairman on a show of hands

542.     This clause replaces section 378(4) of the 1985 Act and part of article 47 of Table A. This provision ensures that the chairman's declaration of a vote taken on a show of hands is conclusive evidence of the resolution being passed or lost without further proof being provided, unless a poll is demanded on the resolution. There are two main differences from section 378(4), both of which are drawn from Table A. First, if the demand for a poll is withdrawn, then the chairman's declaration will stand. Second, the minutes of the meeting also provide conclusive evidence of the chairman's declaration. This clause is intended to provide certainty by preventing members from challenging a declaration of the chairman as to the votes cast on a resolution at a meeting otherwise than by calling a poll.

Clause 304: Right to demand a poll

543.     This clause replaces section 373 of the 1985 Act. It restricts companies' ability, through their articles, to exclude members' rights to call a poll. However, it allows articles to exclude the right to a poll on the election of the chairman of the meeting and the adjournment of the meeting. The clause provides for three effective types of demands for a poll, including a demand made by at least 5 members with a right to vote on the resolution.

Clause 305: Voting on a poll

544.     This clause replaces section 374 of the 1985 Act. This provision recognises that a member may hold shares on behalf of third parties and allows the member to cast votes in different ways according to instructions from his clients. The reference to class meetings in section 374 is dealt with by clause 317 (application to class meetings).

Clause 306: Representation of corporations at meetings

545.     This clause replaces section 375 of the 1985 Act. The clause expressly provides for the appointment of multiple corporate representatives. This is possible under section 375. The effect of appointing multiple representatives under the existing law is in some cases unclear. The clause spells out the position. Any one of the corporate representatives will be entitled to vote and exercise other powers on behalf of the member at meetings, but in the event that representatives' votes or other powers conflict, the corporation is deemed to have abstained from exercising its vote or power. If a corporation wishes to appoint people with different voting intentions or with authority to vote different blocks of shares, they should appoint proxies.

Proxies

Clause 307: Rights to appoint proxies

546.     This clause sets out new provisions for the appointment of proxies, expanding on the existing rights given under section 372 of the 1985 Act and Table A. It puts on a statutory footing certain rights that under the 1985 Act are subject to the articles. In future, members of both private and public companies will have the right to appoint more than one proxy. All proxies will be able to attend, to speak and to vote at a meeting. As to the voting rights of a proxy on a show of hands, see subsection (2)(b) of clause 267 (votes: general rules) and clause 268 (votes: specific requirements). The effect of those clauses is that the default position will be that, where a member appoints more than one proxy, each proxy will have a vote. The articles will be capable of restricting the number of votes of the proxies, provided that they still have at least one vote between them.

Clause 308: Notice of meeting to contain statement of rights

547.     This clause replaces sections 372(3) and 372(4) of the 1985 Act with changes consequential on the extended rights to appoint proxies under clause 307 (rights to appoint proxies). The new provision requires every notice calling a meeting to contain a statement informing the member of his rights to appoint one or more proxies and any more extensive rights conferred by the company's articles. Failure to include such a statement will not invalidate the meeting, but is an offence attracting a fine for every officer of the company found in default.

Clause 309: Company-sponsored invitations to appoint proxies

548.     This clause reproduces the effect of section 372(6) of the 1985 Act and requires a company to ensure that if it invites members to appoint a particular person or persons as proxy, such an invitation must be issued to all members entitled to vote at the meeting. Subsection (2) lists two exceptions to the requirement. Failure to comply attracts a fine for every officer in default.

Clause 310: Notice required of appointment of proxy etc

549.     This clause replaces section 372(5) of the 1985 Act. There are two changes. The first relates to the timing required for a notice of proxy appointment. The new provision ensures that weekends, Christmas Day, Good Friday and any bank holiday are excluded from the time counting towards the minimum 48 hour notice required to appoint proxies. This means, for example, that for a meeting to be held at 3.00 pm on a Tuesday after a bank holiday Monday, the cut-off point for proxy appointment will be 3.00 pm the previous Thursday, not 3.00 pm on Sunday as under the 1985 Act. The second is that polls which are not taken immediately are covered by the rules as well as meetings and adjourned meetings.

Clause 311: Chairing meetings

550.     This clause provides as a default rule, subject to the articles, that a proxy may be elected as chairman of a general meeting by resolution of the company passed at the meeting.

Clause 312: Right of proxy to demand a poll

551.     This clause sets out the way in which a proxy may participate in a demand for a poll.

Clause 313: Notice required of termination of proxy's authority

552.     This clause provides a default regulation to replace article 63 of Table A. This ensures that, subject to the articles, an appointed proxy's actions at a meeting are valid unless notice of termination of the proxy's authority is given before the meeting starts. The company's articles may specify a longer advance notice period but this cannot be more than 48 hours in advance of the meeting (excluding weekends, Christmas Day, Good Friday and bank holidays).

Clause 314: Saving for more extensive rights conferred by articles

553.     This clause makes clear that the company's articles may confer more extensive rights than are provided for under the provisions of the Bill on members and their proxies.

Adjourned meetings

Clause 315: Resolution passed at adjourned meeting

554.     This clause reproduces the effect of part of section 381 of the 1985 Act as it applies to members' meetings. It ensures that a resolution of the members of the company passed at an adjourned meeting is treated as passed on that date and not on any earlier date. The reference to class meetings in section 381 is dealt with by clause 317 (application to class meetings).

Electronic communications

Clause 316: Sending documents relating to meetings etc in electronic form

555.     This clause needs to be read together with the provisions about electronic communications to companies in Part 3 of Schedule 5 (communications in electronic form). Taken together these provisions allow a member to communicate with the company by electronic means where the company has given an electronic address in a notice calling a meeting or in an instrument of proxy or proxy invitation.

Application to class meetings

Clause 317: Application to class meetings

556.     This clause applies the provisions of this Chapter with some modifications to meetings of holders of a class of shares in companies having a share capital.

Clause 318: Application to class meetings: companies without a share capital

557.     This clause applies the provisions of this Chapter with some modifications to meetings of classes of members of companies without a share capital.

CHAPTER 4: PUBLIC COMPANIES: ADDITIONAL REQUIREMENTS FOR AGMS

558.     The requirements for public companies relating to annual general meetings are set out in this Chapter. The main substantive changes to the 1985 Act are, as the CLR recommended, that:

• private companies will no longer be required to hold an AGM. The provisions of this Chapter therefore do not apply to private companies; and

• public company AGMs must be held within six months of their financial year-end.

Clause 319: Public companies: annual general meeting

559.     This clause replaces section 366 of the 1985 Act but will apply only to public companies since private companies are no longer to be required to hold an AGM. Where section 366 required an AGM to be held each year and not more than 15 months after the previous AGM, a public company will now be required to hold an AGM within 6 months of its financial year-end. This new requirement is intended to ensure that shareholders have a more timely opportunity to hold the directors of a public company to account.

Clause 320: Public companies: notice of AGM

560.     This clause reproduces the effect of parts of section 369 of the 1985 Act relating to the AGM notice. The minimum notice period for calling a public company AGM is 21 days as set out in subsection (2) of clause 290 (notice required of general meeting) or longer if provided for in the company's articles. An AGM may be called at shorter notice if all members of the company agree.

Clause 321: Public companies: members' power to require circulation of resolutions for AGMs

561.     This clause, with clause 322 (public companies: company's duty to circulate members' resolutions for AGMs), replaces sections 376 and 377 of the 1985 Act (to the extent that they relate to resolutions proposed by members to be moved at an AGM). Members holding at least 5% voting rights or at least 100 members holding on average £100 paid-up capital have the right to propose a resolution for the AGM agenda and to require the company to circulate details of the resolution to all members. A change from the existing legislation is that the shares must in each case carry rights to vote on the relevant resolution. The key policy change is that, if the members' request is received before the financial year-end, then the members are not required to cover the costs of circulation.

Clause 322: Public companies: company's duty to circulate members' resolutions for AGMs

562.     This clause replaces the remaining parts of sections 376 and 377 of the 1985 Act (to the extent that they relate to resolutions proposed by members to be moved at an AGM). It specifies what a company has to do when it is required to circulate a members' resolution for an AGM.

Clause 323: Public companies: expenses of circulating members' resolutions for AGM

563.     This clause provides that the expenses of complying with clause 322 (public companies: company's duty to circulate members' resolutions for AGMs) need not be paid by the members who requested the circulation of the resolution if requests sufficient to require the company to circulate it are received before the company's year-end. Otherwise the company's expenses will have to be met by the members who requested the circulation of the resolution unless the company resolves otherwise. In this case, the members requesting the statement must deposit a sum to cover the company's costs (unless the company has resolved otherwise)

CHAPTER 5: ADDITIONAL REQUIREMENTS FOR QUOTED COMPANIES

564.     This Chapter imposes new requirements on quoted companies relating to the disclosure on a website of the results of polls at general meetings, and an independent report on a poll if a sufficient number of members demand one. These two measures were recommended by the CLR (Final Report, paragraph 6.39(ii) and (iv)).

Website publication of poll results

Clause 324: Results of poll to be made available on website

565.     This clause requires quoted companies to disclose on a website the results of all polls taken at a general meeting. Subsection (1) sets out the minimum information that must be disclosed. Companies may disclose additional information about the poll results if they wish. Subsection (4) imposes a penalty on every officer in default for non-compliance. Non-compliance however does not invalidate the poll, the resolution or other business to which the poll relates. Clause 336 (requirements as to website availability) sets out the requirements relating to the website on which the poll results must be published.

Independent report on poll

Clause 325: Members' power to require independent report on poll

566.     This clause gives members of a quoted company the right to require an independent report of any poll taken, or to be taken, at a general meeting. The minimum threshold required for the demand is the same as that for requiring the circulation of a resolution - that is members holding 5% of the voting rights or 100 members holding on average £100 of paid-up capital. The members' request must be made within one week of the meeting where the poll is taken. This allows members to decide after a poll is taken whether they wish to require an independent report, for example on a controversial resolution or where there appears to be a problem relating to voting procedures. Members may make their request in advance of the meeting if they wish, but unless the company's articles already require all votes to be taken on a poll, members may need to take steps to ensure that a poll is called.

Clause 326: Appointment of independent assessor

567.     The appointment of an independent assessor must be made within one week of the members' request. This means that the appointment could be made either before or after the meeting depending on when the members' request is made. The

independent assessor must be independent (see clause 327) and must not be someone already involved in the voting process for the company.

Clause 327: Independence requirement

568.     This clause prevents a person acting as an independent assessor on a poll if he is too closely connected to the company or an associated undertaking of the company. The independence requirements are set out in subsection (1). They correspond to the independence requirements for a statutory auditor (see clause 843). Subsection (2) allows, but does not require, an auditor to be appointed as an assessor.

Clause 328: Meaning of "associate"

569.     This clause defines "associate" for the purposes of the independence requirements in clause 327 (independence requirement).

Clause 329: Effect of appointment of a partnership

570.     This clause provides for where a partnership that is not a legal person is appointed as an independent assessor on a poll.

Clause 330: The independent assessor's report

571.     This clause sets out the minimum information the independent assessor's report must contain.

Clause 331: Rights of independent assessor: right to attend meeting etc

572.     This clause gives the independent assessor rights to attend the meeting at which the poll or polls may be taken and to be provided with information relating to the meeting. He is to exercise these rights only to the extent he considers necessary for the preparation of his report.

Clause 332: Rights of independent assessor: right to information

573.     This clause gives the independent assessor the right to access company records relating to any poll on which he is to report and to the meeting at which the poll or polls may be taken.

Clause 333: Offences relating to provision of information

574.     This clause imposes a penalty on any person listed in subsection (2) of clause 332 (rights of independent assessor: right to information) who fails to comply with the requirement to provide information or explanation relating to the poll on which the independent assessor is preparing a report.

Clause 334: Information to be made available on website

575.     This clause requires the company to publish on a website the independent assessor's report of the poll or polls and sets out the minimum information relating to the assessor's appointment, his identity, the text of the resolution and the assessor's report that must be made available. Subsections (3) and (4) impose a penalty on every officer in default for non-compliance with this requirement. Failure to comply, however, does not invalidate the poll or the resolution or other business to which the poll relates. Clause 336 (requirements as to website availability) sets out the requirements relating to the website on which the independent report must be published.

Supplementary

Clause 335: Application of provisions to class meetings

576.     This clause applies the provisions of this Chapter to meetings of holders of a class of shares of a quoted company.

Clause 336: Requirements as to website availability

577.     This clause sets out the minimum requirements that should apply to information to be published on a quoted company's website under clause 324 (results of poll to be made available on website) and clause 334 (information to be made available on website). The website on which the information is made available must be maintained by or on behalf of the quoted company and must identify the company in question. This provides flexibility as to whether a website is the company's own or one operated by a website service provider. Information published on a website must be kept available for a minimum of two years. Subsection (5) provides a let-out when a company's failure to make the information available on a website for part of the period is wholly attributable to circumstances beyond the company's control.

Clause 337: Power to limit or extend the types of company to which provisions of this Chapter apply

578.     At present the provisions of this Chapter apply to quoted companies as defined in clause 367 (quoted and unquoted companies), which replaces the definition of "quoted company" in section 262 (minor definitions) of the 1985 Act. This clause confers on the Secretary of State a power to make regulations to limit or extend the types of company to which the provisions of this Chapter apply. The Parliamentary procedure that will apply to such regulations depends on whether they extend or limit the application of the Chapter.