Meeting and resolution rules under the Companies Act 2006

Under the Companies Act 2006, private companies do not have to hold annual general meetings (AGMs), unless they are a ‘traded company’ or their articles require them to hold such meetings. However, directors of private companies still need to involve shareholders in the decision-making process of the company.

 If necessary, a company may need to pass a resolution to remove any existing clauses about AGMs from its articles. Many decisions can now be made by written resolution, although a company still needs to hold a meeting to dismiss a director or remove an auditor before the end of their term of office.

 The shareholders and directors still have the power to call a meeting, if needed. Shareholder meetings for private companies require a notice period of at least 14 days – unless it says differently in a company’s articles.

 However, public companies must give at least 21 days’ notice for a general meeting unless three conditions are satisfied, in which case it can be held at 14 days’ notice.

 These conditions are that:

• the meeting is not an AGM
• the company allows all members eligible to vote at general meetings the facility to vote by electronic means
• the company has passed a special resolution reducing the period of notice to 14 days at the previous AGM (or a general meeting held since the AGM)

 For new companies that have not yet held an AGM, the special resolution can also be passed at a general meeting.

 Adjourned meetings can be held at shorter notice, but where a meeting is adjourned for lack of a quorum; the rescheduled meeting must be held at least ten days after the original meeting and must not include any new business.

 Since October 2007, a company has been required to hold an extraordinary general meeting to pass an extraordinary resolution only if it is stated in its articles. Any resolution that was passed as an extraordinary resolution under the Companies Act 1985 can now be passed as a special resolution.

 Resolutions

The majority for written resolutions is the same as for shareholders’ meetings:

• a simple majority of eligible shares for ordinary resolutions
• 75 per cent for special resolutions

Members can either sign a paper copy of the resolution or show agreement electronically.

Auditors should still get all communications that go to members in connection with resolutions.

Elective resolutions

Private limited companies no longer need to file elective resolutions for the following purposes:

• dispensing with the laying of accounts and reports before a general meeting (s252)
• dispensing with the holding of AGMs (s366a)
• reduction of majority required to authorise a meeting at short notice (s369(4) or 378(3))
• dispensing with the annual appointment of auditors (s386)

If elective resolutions are filed, they will still be placed on the public record. Elective resolutions previously filed by companies will stay in force – the company doesn’t need to amend its articles.

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