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Company Law Reform Bill [HL] (156-162)


Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 4 — Public companies: additional requirements for AGMs

156

 

344     

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 314(2) or by the company’s articles (as the case may be), if all the

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members entitled to attend and vote at the meeting agree to the shorter notice.

345     

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

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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),

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(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

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members who have a right to vote on the resolution at the annual

general meeting to which the requests relate (excluding any voting

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

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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

member, of at least £100.

(4)   

A request—

(a)   

may be in hard copy form or in electronic form,

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(b)   

must identify the resolution of which notice is to be given,

(c)   

must be authenticated by the person or persons making it, and

(d)   

must be received by the company not later than—

(i)   

6 weeks before the annual general meeting to which the

requests relate, or

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(ii)   

if later, the time at which notice is given of that meeting.

346     

Public companies: company’s duty to circulate members’ resolutions for

AGMs

(1)   

A company that is required under section 345 to give notice of a resolution

must send a copy of it to each member of the company entitled to receive notice

40

of the annual general meeting—

(a)   

in the same manner as notice of the meeting, and

(b)   

at the same time as, or as soon as reasonably practicable after, it gives

notice of the meeting.

 
 

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies

157

 

(2)   

Subsection (1) has effect subject to section 347(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

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

5

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;

(b)   

on summary conviction, to a fine not exceeding the statutory

maximum.

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347     

Public companies: expenses of circulating members’ resolutions for AGM

(1)   

The expenses of the company in complying with section 346 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 end of

the financial year preceding the meeting.

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(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

unless the company resolves otherwise, and

(b)   

unless the company has previously so resolved, it is not bound to

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comply with that section unless there is deposited with or tendered to

it, not later than—

(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,

25

   

a sum reasonably sufficient to meet its expenses in complying with that

section.

Chapter 5

Additional requirements for quoted companies

Website publication of poll results

30

348     

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

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

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subject matter of the poll,

(c)   

the number of votes cast in favour, and

(d)   

the number of votes cast against.

(2)   

The provisions of section 360 (requirements as to website availability) apply.

 
 

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies

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(3)   

In the event of default in complying with this section (or with the requirements

of section 360 as it applies for the purposes of this section), an offence is

committed by every officer of the company who is in default.

(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

(5)   

Failure to comply with this section (or the requirements of section 360) does not

affect the validity of—

(a)   

the poll, or

(b)   

the resolution or other business (if passed or agreed to) to which the

poll relates.

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(6)   

This section only applies to polls taken after this section comes into force.

Independent report on poll

349     

Members’ power to require independent report on poll

(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

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the company.

(2)   

The directors are required to obtain an independent report if they receive

requests to do so from—

(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

20

relates (excluding any voting rights attached to any shares in the

company held as treasury shares), or

(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.

25

(3)   

Where the requests relate to more than one poll, subsection (2) must be

satisfied in relation to each of them.

(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,

30

(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

on which the poll is taken.

350     

Appointment of independent assessor

(1)   

Directors who are required under section 349 to obtain an independent report

35

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.

(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—

40

(a)   

does not meet the independence requirement in section 351, or

 
 

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies

159

 

(b)   

has another role in relation to any poll on which he is to report

(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

(5)   

A person guilty of an offence under this section is liable on summary

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

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(b)   

his appointment ceases (but without prejudice to any right to be paid

for work done before the appointment ceased).

351     

Independence requirement

(1)   

A person may not be appointed as an independent assessor—

(a)   

if he is—

15

(i)   

an officer or employee of the company, or

(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

20

company, or

(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—

(i)   

the person or an associate of his, and

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(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

company for this purpose.

30

(3)   

In this section—

“associated undertaking” means—

(a)   

a parent undertaking or subsidiary undertaking of the

company, or

(b)   

a subsidiary undertaking of a parent undertaking of the

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company; and

“associate” has the meaning given by section 352.

(4)   

Regulations under this section are subject to negative resolution procedure.

352     

Meaning of “associate”

(1)   

This section defines “associate” for the purposes of section 351 (independence

40

requirement).

(2)   

In relation to an individual, “associate” means—

(a)   

that individual’s spouse or civil partner or minor child or step-child,

 
 

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies

160

 

(b)   

any body corporate of which that individual is a director, and

(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

5

(c)   

any employee or partner of that body or of any body corporate in the

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,

10

(b)   

any employee of or partner in that partnership, and

(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.

15

(6)   

In this section, in relation to a limited liability partnership, for “director” read

“member”.

353     

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.

20

(2)   

Unless a contrary intention appears, the appointment is of the partnership as

such and not of the partners.

(3)   

Where the partnership ceases, the appointment is to be treated as extending

to—

(a)   

any partnership that succeeds to the practice of that partnership, or

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(b)   

any other person who succeeds to that practice having previously

carried it on in partnership.

(4)   

For the purposes of subsection (3)—

(a)   

a partnership is regarded as succeeding to the practice of another

partnership only if the members of the successor partnership are

30

substantially the same as those of the former partnership, and

(b)   

a partnership or other person is regarded as succeeding to the practice

of a partnership only if it or he succeeds to the whole or substantially

the whole of the business of the former partnership.

(5)   

Where the partnership ceases and the appointment is not treated under

35

subsection (3) as extending to any partnership or other person, the

appointment may with the consent of the company be treated as extending to

a partnership, or other person, who succeeds to—

(a)   

the business of the former partnership, or

(b)   

such part of it as is agreed by the company is to be treated as comprising

40

the appointment.

354     

The independent assessor’s report

(1)   

The report of the independent assessor must state his opinion whether—

 
 

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies

161

 

(a)   

the procedures adopted in connection with the poll or polls were

adequate;

(b)   

the votes cast (including proxy votes) were fairly and accurately

recorded and counted;

(c)   

the validity of members’ appointments of proxies was fairly assessed;

5

(d)   

the notice of the meeting complied with section 332 (notice of meeting

to contain statement of rights to appoint proxy);

(e)   

section 333 (company-sponsored invitations to appoint proxies) was

complied with in relation to the meeting.

(2)   

The report must give his reasons for the opinions stated.

10

(3)   

If he is unable to form an opinion on any of those matters, the report must

record that fact and state the reasons for it.

(4)   

The report must state the name of the independent assessor.

355     

Rights of independent assessor: right to attend meeting etc

(1)   

Where an independent assessor has been appointed to report on a poll, he is

15

entitled to attend—

(a)   

the meeting at which the poll may be taken, and

(b)   

any subsequent proceedings in connection with the poll.

(2)   

He is also entitled to be provided by the company with a copy of—

(a)   

the notice of the meeting, and

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(b)   

any other communication provided by the company in connection with

the meeting to persons who have a right to vote on the matter to which

the poll relates.

(3)   

The rights conferred by this section are only to be exercised to the extent that

the independent assessor considers necessary for the preparation of his report.

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(4)   

If the independent assessor is a firm, the right under subsection (1) to attend

the meeting and any subsequent proceedings in connection with the poll is

exercisable by an individual authorised by the firm in writing to act as its

representative for that purpose.

356     

Rights of independent assessor: right to information

30

(1)   

The independent assessor is entitled to access to the company’s records

relating to—

(a)   

any poll on which he is to report;

(b)   

the meeting at which the poll or polls may be, or were, taken.

(2)   

The independent assessor may require anyone who at any material time was—

35

(a)   

a director or secretary of the company,

(b)   

an employee of the company,

(c)   

a person holding or accountable for any of the company’s records,

(d)   

a member of the company, or

(e)   

an agent of the company,

40

   

to provide him with information or explanations for the purpose of preparing

his report.

 
 

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 14 — Resolutions and meetings
Chapter 5 — Additional requirements for quoted companies

162

 

(3)   

For this purpose “agent” includes the company’s bankers, solicitors and

auditor.

(4)   

A statement made by a person in response to a requirement under this section

may not be used in evidence against him in criminal proceedings except

proceedings for an offence under section 357 (offences relating to provision of

5

information).

(5)   

A person is not required by this section to disclose information in respect of

which a claim to legal professional privilege (in Scotland, to confidentiality of

communications) could be maintained in legal proceedings.

357     

Offences relating to provision of information

10

(1)   

A person who fails to comply with a requirement under section 356 without

delay commits an offence unless it was not reasonably practicable for him to

provide the required information or explanation.

(2)   

A person guilty of an offence under subsection (1) is liable on summary

conviction to a fine not exceeding level 3 on the standard scale.

15

(3)   

A person commits an offence who knowingly or recklessly makes to an

independent assessor a statement (oral or written) that—

(a)   

conveys or purports to convey any information or explanations which

the independent assessor requires, or is entitled to require, under

section 356, and

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(b)   

is misleading, false or deceptive in a material particular.

(4)   

A person guilty of an offence under subsection (3) is liable—

(a)   

on conviction on indictment, to imprisonment for a term not exceeding

two years or a fine (or both);

(b)   

on summary conviction—

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(i)   

in England and Wales, to imprisonment for a term not

exceeding twelve months or to a fine not exceeding the

statutory maximum (or both);

(ii)   

in Scotland or Northern Ireland, to imprisonment for a term not

exceeding six months, or to a fine not exceeding the statutory

30

maximum (or both).

(5)   

Nothing in this section affects any right of an auditor to apply for an injunction

(in Scotland, an interdict or an order for specific performance) to enforce any

of his rights under section 355 or 356.

358     

Information to be made available on website

35

(1)   

Where an independent assessor has been appointed to report on a poll, the

company must ensure that the following information is made available on a

website—

(a)   

the fact of his appointment,

(b)   

his identity,

40

(c)   

the text of the resolution or, as the case may be, a description of the

subject matter of the poll to which his appointment relates, and

(d)   

a copy of a report by him which complies with section 354.

(2)   

The provisions of section 360 (requirements as to website availability) apply.

 
 

 
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