Every now and again, you may find you need to call a shareholders meeting to discuss changing issues that are decided by shareholders. Changes such as this are called resolutions, and they must receive a majority vote from the shareholders to go ahead.
However, it’s not acceptable to simply send an email meeting request around to your shareholders when you realise you need to get everyone together for a vote. Instead, a formal process must be followed to set up and run a shareholders meeting properly.
So, what do you need to do for a shareholders meeting?
First, give the shareholders ample notice of the meeting. A notice must be sent (either by post or electronically) to each shareholder at least 14 days before the meeting.
The only exception to this notice period is if all those attending with voting rights (for annual general meetings) or the majority of those attending with voting rights and at least 90% in nominal value of the shares between them (for general meetings) have given written and signed consent to a shorter notice period.
The notice must include when and where the meeting will take place, and it should also give the shareholders information on what is to be discussed during the meeting.
You should also advise the shareholder that they’re welcome to appoint a proxy if they can’t attend the shareholders meeting. A proxy is someone who can attend the shareholders meeting and vote on a poll or a show of hands on the shareholders behalf. A shareholder can appoint a proxy within a certain amount of time (no more than 48 hours) before the meeting.
Is there a minimum number of shareholders needed for a meeting to go ahead?
Yes, there is. The official name for this is a quorum, and it’s usually set at 2 shareholders. Unless of course, the business only has one shareholder.
How can a resolution be voted on at a shareholders’ meeting?
Votes are counted based on either a show of hands or a poll. Some decisions – for example, the approval of credit transactions – can be decided on the basis of reaching over 50% of the votes. This is known as a simple majority, and the decisions that use this voting type are known as ordinary resolutions.
However some more complex decisions – for example, changes to the articles of association – are known as special resolutions, and these must be decided by a majority vote of at least 75% of the voting members.
Take a look at our guide to shareholder ordinary resolutions and special resolutions to see which type of resolution different types of resolutions will need.
Once the resolution has been voted on, you must then file them with Companies House within 15 days of the meeting, also sending accompanying forms and fees where necessary.
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