Shareholder Rights
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1. How many votes does a proxy have on a show of hands? (regulation 3, section 285)
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2. What is the new threshold for shareholders to require the directors to call a general meeting? (regulation 4, section 303)
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3. How many votes does a corporate representative have on a show of hands? (regulation 6, section 323)
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4. Does the Designated Corporate Representative (DCR) procedure still need to be used?
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5. Can meetings be held at less than 21 days notice? (regulation 9, section 307A)
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6. What is a "facility to vote by electronic means accessible to all members"? (regulation 9, section 307A)
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7. Can adjourned meetings be held at shorter notice? (regulation 9, section 307A)
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8. What additional items must be included on the notice of meeting and what must be published on a website? (regulation 10 and 11, sections 311 and 311A)
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9. What information must be published on a website after the meeting? (regulation 18, section 341)
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10. Questions at meetings: do all questions have to be answered? (regulation 12, section 319A)
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11. Who pays the expenses of circulating an item requested to be included by a shareholder on the agenda of an annual general meeting? (regulation 17 and 18, section 338A, 340A and 340B)
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12. What is the record date? (regulation 20, section 360B)
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13. What is the definition of traded company? (regulation 21, section 360C)
On a vote on a show of hands at a meeting, every proxy present has one vote. However, if the proxy has been appointed by more than one member, and if he has been instructed by those members to vote both for and against the resolution, then the proxy has one vote for and one vote against.
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The directors are required to call a general meeting once the company has received requests to do so from members representing at least 5% paid up voting share capital, or in the case of a company not having share capital, members who represent at least 5% of the total voting rights of all the members having a right to vote at general meetings. The threshold has been reduced from 10%.
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On a vote on a show of hands, each corporate representative has the same voting rights to which the corporation would be entitled. Where a corporation authorises more than one person to act as its representative, those representatives may vote in different ways in respect of different shares.
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The uncertainties surrounding the operation of proxy and corporate representative voting in the Companies Act 2006 has been clarified. This means that the DCR procedure is no longer necessary.
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Yes. Traded companies may hold meetings at 14 days notice provided the following 3 conditions are met:
- the meeting must not be an annual general meeting;
- the company offers the facility for members to vote by electronic means (see below) accessible to all members who hold shares that carry rights to vote at general meetings; and
- that a special resolution reducing the period of notice to not less than 14 days has been passed at the immediately preceding annual general meeting, or at a general meeting held since that annual general meeting, or, in the case of new companies which have not yet held an AGM, at a general meeting.
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This is a facility, offered by the company and accessible to all members, to appoint a proxy by means of a website. This means that enabling electronic appointments through CREST membership, on its own, is not sufficient. The company must offer voting to all members on its, or another, website.
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At least 10 days’ notice must be given to reconvene meetings adjourned due to lack of a quorum, and only if no new business not covered in the original meeting notice is to be dealt with at the reconvened meeting.
Meetings adjourned for other reasons (e.g. problems with the venue) can continue to be held at shorter notice.
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In addition to stating the time, date and place of the meeting, and the general nature of the business to be dealt with, the meeting notice for traded companies must also include:
- a statement giving the address of the website on which information about the meeting is published;
- a statement that the right to vote at the meeting is determined by reference to the register of members, and of the time when that right will be determined;
- a statement of the procedures with which members must comply in order to be able to attend and vote at the meeting (including the date by which they must comply);
- a statement giving details of any forms to be used for the appointment of a proxy;
- where the company offers the facility for members to vote in advance or by electronic means, a statement of the procedure for doing so (including the date by which it must be done and details of any forms to be used); and
- a statement of the right of members to ask questions.
On or before the date that notice is given, the following information must be available on a website:
- the matters set out in the notice of the meeting;
- the total numbers of shares in the company, and shares of each class, in respect of which members are entitled to exercise voting rights at the meeting;
- the totals of the voting rights that members are entitled to exercise at the meeting in respect of the shares of each class; and
- members’ statements, members’ resolutions and members’ matters of business received by the company after the first date on which notice of the meeting is given.
This information must be available on the website for a period of 2 years.
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Where a poll is taken at a general meeting of a traded company, the following information must be made available on a website:
- the date of the meeting;
- the text of the resolution or, as the case may be, a description of the subject matter of the poll;
- the number of votes validly cast;
- the proportion of the company’s issued share capital (determined at the record date) represented by those votes;
- the number of votes cast in favour;
- the number of votes cast against; and
- the number of abstentions (if counted).
The information must be published on the website within 16 days of the meeting, or if later, the end of the first working day after the day on which the result of the poll is declared.
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The company must answer any question relating to the business being dealt with at the meeting put by a member at the meeting, however, the company need not answer if:
- to do so would interfere unduly with the preparation for the meeting; or
- to answer would involve the disclosure of confidential information; or
- the answer has already been given on a website in the form of an answer to a question; or
- it is undesirable in the interests of the company or the good order of the meeting that the question be answered.
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Members have a new right to request that the company include an item in the business of the annual general meeting. As is the case for resolutions requested by shareholders, the company pays the expense of circulation of the agenda item if the request is received before the end of the financial year preceding the meeting. If the request is received after the end of the financial year, the expenses are borne by the shareholder.
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The company must determine the right to vote at a general meeting by reference to the register of members as at the record date. The record date for traded companies must be set at a time that is not more than 48 hours before the time for the holding of the meeting ignoring any part of a day that is not a working day.
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Traded company means a company any shares of which carry rights to vote at general meetings, and are traded on a regulated market in an EEA state by or with the consent of the company. This means that private companies whose shares are traded on a regulated market without the consent of the company are not covered by the provisions of the Directive.
Regulated markets in the UK include the London Stock Exchange main market and the listed elements of PLUS, but not AIM.
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