Company Law Reform Bill [HL] (139-142)

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL] (139-142)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 2 — Written resolutions
139

Circulation of written resolutions
297
Circulation date
References in this Part to the circulation date of a written resolution are to the
date on which copies of it are sent or submitted to members in accordance with
this Chapter (or if copies are sent or submitted to members on different days,
5
to the first of those days).
298
Circulation of written resolutions proposed by directors
(1)
This section applies to a resolution proposed as a written resolution by the
directors of the company.
(2)
The company must send or submit a copy of the resolution to every eligible
10
member.
(3)
The company must do so—
(a)
by sending copies at the same time (so far as reasonably practicable) to
all eligible members in hard copy form, in electronic form or by means
of a website, or
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(b)
if it is possible to do so without undue delay, by submitting the same
copy to each eligible member in turn (or different copies to each of a
number of eligible members in turn),

or by sending copies to some members in accordance with paragraph (a) and
submitting a copy or copies to other members in accordance with paragraph
20
(b).
(4)
The copy of the resolution must be accompanied by a statement informing the
member—
(a)
how to signify agreement to the resolution (see section 303), and
(b)
as to the date by which the resolution must be passed if it is not to lapse
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(see section 304).
(5)
In the event of default in complying with this section, an offence is committed
by every officer of the company who is in default.
(6)
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.
(7)
The validity of the resolution, if passed, is not affected by a failure to comply
with this section.
299
Members’ power to require circulation of written resolution
35
(1)
The members of a private company may require the company to circulate a
resolution that may properly be moved and is proposed to be moved as a
written resolution.
(2)
Any resolution may properly be moved as a written resolution unless—
(a)
it would, if passed, be ineffective (whether by reason of inconsistency
40
with any enactment or the company’s constitution or otherwise),
(b)
it is defamatory of any person, or

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 2 — Written resolutions
140

(c)
it is frivolous or vexatious.
(3)
Where the members require a company to circulate a resolution they may
require the company to circulate with it a statement of not more than 1,000
words on the subject matter of the resolution.
(4)
A company is required to circulate the resolution and any accompanying
5
statement once it has received requests that it do so from members
representing not less than the requisite percentage of the total voting rights of
all members entitled to vote on the resolution.
(5)
The “requisite percentage” is 5% or such lower percentage as is specified for
this purpose in the company’s articles.
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(6)
A request—
(a)
may be in hard copy form or in electronic form,
(b)
must identify the resolution and any accompanying statement, and
(c)
must be authenticated by the person or persons making it.
300
Circulation of written resolution proposed by members
15
(1)
A company that is required under section 299 to circulate a resolution must
send or submit to every eligible member—
(a)
a copy of the resolution, and
(b)
a copy of any accompanying statement.

This is subject to section 301(2) (deposit or tender of sum in respect of expenses
20
of circulation) and section 302 (application not to circulate members’
statement).
(2)
The company must do so—
(a)
by sending copies at the same time (so far as reasonably practicable) to
all eligible members in hard copy form, in electronic form or by means
25
of a website, or
(b)
if it is possible to do so without undue delay, by submitting the same
copy to each eligible member in turn (or different copies to each of a
number of eligible members in turn),

or by sending copies to some members in accordance with paragraph (a) and
30
submitting a copy or copies to other members in accordance with paragraph
(b).
(3)
The company must send or submit the copies (or, if copies are sent or
submitted to members on different days, the first of those copies) not more
than 21 days after it becomes subject to the requirement under section 299 to
35
circulate the resolution.
(4)
The copy of the resolution must be accompanied by guidance as to—
(a)
how to signify agreement to the resolution (see section 303), and
(b)
the date by which the resolution must be passed if it is not to lapse (see
section 304).
40
(5)
In the event of default in complying with this section, an offence is committed
by every officer of the company who is in default.
(6)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 2 — Written resolutions
141

(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
(7)
The validity of the resolution, if passed, is not affected by a failure to comply
with this section.
301
Expenses of circulation
5
(1)
The expenses of the company in complying with section 300 must be paid by
the members who requested the circulation of the resolution unless the
company resolves otherwise.
(2)
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 a sum reasonably
10
sufficient to meet its expenses in doing so.
302
Application not to circulate members’ statement
(1)
A company is not required to circulate a members’ statement under section 300
if, on an application by the company or another person who claims to be
aggrieved, the court is satisfied that the rights conferred by section 299 and that
15
section are being abused.
(2)
The court may order the members who requested the circulation of the
statement to pay the whole or part of the company’s costs (in Scotland,
expenses) on such an application, even if they are not parties to the application.
Agreeing to written resolutions
20
303
Procedure for signifying agreement to written resolution
(1)
A member signifies his agreement to a proposed written resolution when the
company receives from him (or from someone acting on his behalf) an
authenticated document—
(a)
identifying the resolution to which it relates, and
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(b)
indicating his agreement to the resolution.
(2)
The document must be sent to the company in hard copy form or in electronic
form.
(3)
A member’s agreement to a written resolution, once signified, may not be
revoked.
30
(4)
A written resolution is passed when the required majority of eligible members
have signified their agreement to it.
304
Period for agreeing to written resolution
(1)
A proposed written resolution lapses if it is not passed before the end of—
(a)
the period specified for this purpose in the company’s articles, or
35
(b)
if none is specified, the period of 28 days beginning with the circulation
date.
(2)
The agreement of a member to a written resolution is ineffective if signified
after the expiry of that period.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 3 — Resolutions at meetings
142

Supplementary
305
Sending documents relating to written resolutions by electronic means
(1)
Where a company has given an electronic address in any document containing
or accompanying a proposed written resolution, it is deemed to have agreed
that any document or information relating to that resolution may be sent by
5
electronic means to that address (subject to any conditions or limitations
specified in the document).
(2)
In this section “electronic address” means any address or number used for the
purposes of sending or receiving documents or information by electronic
means.
10
306
Publication of written resolution on website
(1)
This section applies where a company sends—
(a)
a written resolution, or
(b)
a statement relating to a written resolution,

to a person by means of a website.
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(2)
The resolution or statement is not validly sent for the purposes of this Chapter
unless the resolution is available on the website throughout the period
beginning with the circulation date and ending on the date on which the
resolution lapses under section 304.
307
Relationship between this Chapter and provisions of company’s articles
20

A provision of the articles of a private company is void in so far as it would
have the effect that a resolution that is required by or otherwise provided for
in an enactment could not be proposed and passed as a written resolution.
Chapter 3
Resolutions at meetings
25
General provisions about resolutions at meetings
308
Resolutions at general meetings

A resolution of the members of a company is validly passed at a general
meeting if—
(a)
notice of the meeting and of the resolution is given, and
30
(b)
the meeting is held and conducted,

in accordance with the provisions of this Chapter (and, where relevant,
Chapter 4) and the company’s articles.
Calling meetings
309
Directors’ power to call general meetings
35
The directors of a company may call a general meeting of the company.