Company Law Reform Bill [HL]

House of Lords

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL]

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 1 — General provisions about resolutions
121

262
Ordinary resolutions
(1)
An ordinary resolution of the members (or of a class of members) of a company
means a resolution that is passed by a simple majority.
(2)
A written resolution is passed by a simple majority if it is passed by members
representing a simple majority of the total voting rights of eligible members
5
(see Chapter 2).
(3)
A resolution passed at a meeting on a show of hands is passed by a simple
majority if it is passed by a simple majority of—
(a)
the members who, being entitled to do so, vote in person on the
resolution, and
10
(b)
the persons who vote on the resolution as duly appointed proxies of
members entitled to vote on it.
(4)
A resolution passed on a poll taken at a meeting is passed by a simple majority
if it is passed by members representing a simple majority of the total voting
rights of members who (being entitled to do so) vote in person or by proxy on
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the resolution.
(5)
Anything that may be done by ordinary resolution may also be done by special
resolution.
263
Special resolutions
(1)
A special resolution of the members (or of a class of members) of a company
20
means a resolution passed by a majority of not less than 75%.
(2)
A written resolution is passed by a majority of not less than 75% if it is passed
by members representing not less than 75% of the total voting rights of eligible
members (see Chapter 2).
(3)
Where a resolution of a private company is passed as a written resolution—
25
(a)
the resolution is not a special resolution unless it stated that it was
proposed as a special resolution, and
(b)
if the resolution so stated, it may only be passed as a special resolution.
(4)
A resolution passed at a meeting on a show of hands is passed by a majority of
not less than 75% if it is passed by not less than 75% of—
30
(a)
the members who, being entitled to do so, vote in person on the
resolution, and
(b)
the persons who vote on the resolution as duly appointed proxies of
members entitled to vote on it.
(5)
A resolution passed on a poll taken at a meeting is passed by a majority of not
35
less than 75% if it is passed by members representing not less than 75% of the
total voting rights of the members who (being entitled to do so) vote in person
or by proxy on the resolution.
(6)
Where a resolution is passed at a meeting—
(a)
the resolution is not a special resolution unless the notice of the meeting
40
included the text of the resolution and specified the intention to
propose the resolution as a special resolution, and
(b)
if the notice of the meeting so specified, the resolution may only be
passed as a special resolution.

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 1 — General provisions about resolutions
122

264
Votes: general rules
(1)
On a vote on a written resolution—
(a)
in the case of a company having a share capital, every member has one
vote in respect of each share or each £10 of stock held by him, and
(b)
in any other case, every member has one vote.
5
(2)
On a vote on a resolution on a show of hands at a meeting—
(a)
every member present in person has one vote, and
(b)
every proxy present who has been duly appointed by a member
entitled to vote on the resolution has one vote.
(3)
On a vote on a resolution on a poll taken at a meeting—
10
(a)
in the case of a company having a share capital, every member has one
vote in respect of each share or each £10 of stock held by him, and
(b)
in any other case, every member has one vote.
(4)
The provisions of this section have effect subject to any provision of the
company’s articles.
15
265
Votes: specific requirements
(1)
Where a member entitled to vote on a resolution has appointed one proxy only,
and the company’s articles provide that the proxy has fewer votes in a vote on
a resolution on a show of hands taken at a meeting than the member would
have if he were present in person—
20
(a)
the provision about how many votes the proxy has on a show of hands
is void, and
(b)
the proxy has the same number of votes on a show of hands as the
member who appointed him would have if he were present at the
meeting.
25
(2)
Where a member entitled to vote on a resolution has appointed more than one
proxy, subsection (1) applies as if the references to the proxy were references
to the proxies taken together.
(3)
In relation to a resolution required or authorised by an enactment, if a private
company’s articles provide that a member has a different number of votes in
30
relation to a resolution when it is passed as a written resolution and when it is
passed on a poll taken at a meeting—
(a)
the provision about how many votes a member has in relation to the
resolution passed on a poll is void, and
(b)
a member has the same number of votes in relation to the resolution
35
when it is passed on a poll as he has when it is passed as a written
resolution.
266
Votes of joint holders of shares
(1)
In the case of joint holders of shares of a company, only the vote of the senior
holder who votes (and any proxies duly authorised by him) may be counted by
40
the company.
(2)
For the purposes of this section, the senior holder of a share is determined by
the order in which the names of the joint holders appear in the register of
members.

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
123

(3)
Subsections (1) and (2) have effect subject to any provision of the company’s
articles.
267
Effect of provision in company’s articles as to admissibility of votes
(1)
This section applies where—
(a)
a person votes on a resolution of a company,
5
(b)
that person was not entitled to vote as he did, and
(c)
the company’s articles provide that an objection to a person’s
entitlement to vote must be made in accordance with a procedure
specified in the articles.
(2)
The person is deemed to have been entitled to vote as he did if—
10
(a)
no objection to his entitlement to vote is made in accordance with the
procedure, or
(b)
at least one objection to his entitlement to vote is made in accordance
with the procedure, and each such objection is rejected in accordance
with it.
15
Chapter 2
Written resolutions
General provisions about written resolutions
268
Written resolutions of private companies
(1)
In the Companies Acts a “written resolution” means a resolution of a private
20
company proposed and passed in accordance with this Chapter.
(2)
The following may not be passed as a written resolution—
(a)
a resolution under section 151 removing a director before the expiration
of his period of office;
(b)
a resolution under section 496 removing an auditor before the
25
expiration of his term of office.
(3)
A resolution may be proposed as a written resolution—
(a)
by the directors of a private company (see section 271), or
(b)
by the members of a private company (see sections 272 to 275).
(4)
References in enactments passed or made before this Chapter comes into force
30
to—
(a)
a resolution of a company in general meeting, or
(b)
a resolution of a meeting of a class of members of the company,

have effect as if they included references to a written resolution of the
members, or of a class of members, of a private company (as appropriate).
35
(5)
A written resolution of a private company has effect as if passed (as the case
may be)—
(a)
by the company in general meeting, or
(b)
by a meeting of a class of members of the company,

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
124


and references in enactments passed or made before this section comes into
force to a meeting at which a resolution is passed or to members voting in
favour of a resolution shall be construed accordingly.
269
Eligible members
(1)
In relation to a resolution proposed as a written resolution of a private
5
company, the eligible members are the members who would have been
entitled to vote on the resolution on the circulation date of the resolution (see
section 270).
(2)
If the persons entitled to vote on a written resolution change during the course
of the day that is the circulation date of the resolution, the eligible members are
10
the persons entitled to vote on the resolution at the time that the first copy of
the resolution is sent or submitted to a member for his agreement.
Circulation of written resolutions
270
Circulation date
References in this Part to the circulation date of a written resolution are to the
15
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,
to the first of those days).
271
Circulation of written resolutions proposed by directors
(1)
This section applies to a resolution proposed as a written resolution by the
20
directors of the company.
(2)
The company must send or submit a copy of the resolution to every eligible
member.
(3)
The company must do so—
(a)
by sending copies at the same time (so far as reasonably practicable) to
25
all eligible members in hard copy form, in electronic form or by means
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),
30

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
(b).
(4)
The copy of the resolution must be accompanied by a statement informing the
member—
35
(a)
how to signify agreement to the resolution (see section 276), and
(b)
as to the date by which the resolution must be passed if it is not to lapse
(see section 277).
(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.
40
(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]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
125

(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.
272
Members’ power to require circulation of written resolution
5
(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
10
with any enactment or the company’s constitution or otherwise),
(b)
it is defamatory of any person, or
(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
15
words on the subject matter of the resolution.
(4)
A company is required to circulate the resolution and any accompanying
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.
20
(5)
The “requisite percentage” is 5% or such lower percentage as is specified for
this purpose in the company’s articles.
(6)
A request—
(a)
may be in hard copy form or in electronic form,
(b)
must identify the resolution and any accompanying statement, and
25
(c)
must be authenticated by the person or persons making it.
273
Circulation of written resolution proposed by members
(1)
A company that is required under section 272 to circulate a resolution must
send or submit to every eligible member—
(a)
a copy of the resolution, and
30
(b)
a copy of any accompanying statement.

This is subject to section 274(2) (deposit or tender of sum in respect of expenses
of circulation) and section 275 (application not to circulate members’
statement).
(2)
The company must do so—
35
(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
(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
40
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
(b).

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
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(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 272 to
circulate the resolution.
(4)
The copy of the resolution must be accompanied by guidance as to—
5
(a)
how to signify agreement to the resolution (see section 276), and
(b)
the date by which the resolution must be passed if it is not to lapse (see
section 277).
(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.
10
(6)
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.
(7)
The validity of the resolution, if passed, is not affected by a failure to comply
15
with this section.
274
Expenses of circulation
(1)
The expenses of the company in complying with section 273 must be paid by
the members who requested the circulation of the resolution unless the
company resolves otherwise.
20
(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
sufficient to meet its expenses in doing so.
275
Application not to circulate members’ statement
(1)
A company is not required to circulate a members’ statement under section 273
25
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 272 and that
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,
30
expenses) on such an application, even if they are not parties to the application.
Agreeing to written resolutions
276
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
35
authenticated document—
(a)
identifying the resolution to which it relates, and
(b)
indicating his agreement to the resolution.
(2)
The document must be sent to the company in hard copy form or in electronic
form.
40

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
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(3)
A member’s agreement to a written resolution, once signified, may not be
revoked.
(4)
A written resolution is passed when the required majority of eligible members
have signified their agreement to it.
277
Period for agreeing to written resolution
5
(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
(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
10
after the expiry of that period.
Supplementary
278
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
15
that any document or information relating to that resolution may be sent by
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
20
means.
279
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,
25

to a person by means of a website.
(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 277.
30
280
Relationship between this Chapter and provisions of company’s articles

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.