z Topic 2:

Meetings
Nur Syakirah Bt Maimun Aqsha
[email protected]
UCL3622 - Company Law II
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CHAPTER OUTLINE: MEETINGS

Meetings

Types of Meetings

Notice of Meeting

Resolutions

Proceedings
 AGM Director
TYPES
EGM Member
VOTE
Court

AGM

NOTICE EGM
Meetings

CHAIRMAN Contents

Period
Venue

PROCEEDINGS Quorum

Proxy

Ordinary

RESOLUTION
Special

Written
POST MEETING
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INTRODUCTION

▪ Companies meetings is where resolutions are passed and the

companies management, administration, directions, business are
determined.
▪ It serves as the check and balance against the director’s power and to
ensure that their duties and responsibilities are discharged
accordingly.
▪ The new Companies Act 2016 was drafted to simplify and facilitate the
companies’ internal decision making process guided by several
principles and objectives.
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What is a meeting?

▪ Sharp v Dawes (1876): The term “meeting” means a coming

together of more than one person
▪ Company Act 2016: recognises certain peculiar situations where
a meeting can be held despite the attendance of only one
member.
▪ Relevant sections: S.9, S.344, S.333
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Objective of meeting

▪ The main objective of a company’s meeting is to pass resolution

which is pertinent to determine the company’s management,
business directions, etc.
▪ What is resolution?
▪ Resolutions are the decision made by a person of persons
regulated by the CA 2016 to ensure its validity and effectiveness.
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TYPES OF MEETINGS

Annual General Meeting (“AGM”)

Extraordinary General Meeting (“EGM”)

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Annual General Meeting (“AGM”)
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Annual General Meeting (‘AGM’)

▪ S.340 of the CA 2016: provides that only a public company is required to hold
an AGM.
▪ AGM to be held every calendar year.
▪ S.340 expressly provides the businesses which shall be transacted at an
AGM as follows:
(a) The laying of audited financial statement and the reports of the directors and
auditors;
(b) The election of directors in place of those retiring;

(c) The appointment and the fixing of the fee of directors; and

(d) Any resolution or other businesses of which notice is given in accordance with
this Act or the constitution.
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Annual General Meeting (‘AGM’)

▪ 1st AGM to be held within eighteen months after its incorporation

S.340(3): “Notwithstanding subsection (1), a company shall not be required to hold an annual general
meeting in the year of its incorporation or in the following year provided that the company hold its first
annual general meeting within eighteen months of its incorporation”

▪ 2nd and subsequent AGM

- To be held every calendar year

- Not later than 6 months from the end of the company’s financial year; and (S.340(2)(a))

- Not later than 15 months after the last AGM. (S.340(2)(b))

- Extension: no later than extended time granted by ROC. (S.340(4))

▪ Failure to call for AGM: Court may order AGM to be called (S.340(5)), Officers commit
an offence (S.340(6)).
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Annual General Meeting (‘AGM’)
▪ How to call for AGM?
Board of Directors (‘BOD’) Company secretary prepare the meeting
needs and send notices to the members
passing a director’s resolution

▪ S.316 (2)(a): provides that at least 21 days’ notice must be given to the members before the
AGM. The company’s constitution may prescribed a longer period.
▪ S.340(5): any member may apply to the court for an order to call for an AGM
- Application to the court may be made by: director, a member or a personal representative of a
member (S.314(2))

▪ S.314 is useful where it is impracticable to call for a meeting to conduct an AGM as

prescribed by the constitution or the Companies Act.
Ex: Where the members frustrate the attempts by the directors to hold an AGM by not attending the
AGM. As there was no quorum, the meeting could not be held. The directors may then apply to the
court for directions on the conduct of the AGM
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Extraordinary General Meeting (“EGM”)
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Extraordinary General Meeting (‘EGM’)

‘AGM’ ‘EGM’
• To decide recurring business • Special businesses
• Urgent / cannot be delayed until
the next AGM
• Public companies only • Applies to both public / private
companies

▪ Who may call for EGM?

(a) The Board
(b) Members
(c) By court order
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Extraordinary General Meeting (‘EGM’)
(a) The Board (Directors)
▪ How to call for EGM? (S.310(a))

Board of Directors (‘BOD’) Company secretary prepare the meeting

needs and send notices to the members
passing a director’s resolution

▪ If one of the items on the agenda is the passing of a special resolution, at

least 21 days’ notice must be given to all the members.
▪ If no special resolution is proposed, 14 days’ notice suffices. However, the
company’s constitution may provide for a longer notice
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Extraordinary General Meeting (‘EGM’)
b) Members

Members may convene

a meeting using either

S.310(b)

S.311
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Extraordinary General Meeting (‘EGM’)
b) Members
Power of members to convene meeting under S. 310(b)
▪ Any member holding at least 10% of the issued share capital of the Company
may require the director to convene an EGM.
▪ The Company’s constitution may prescribe a lower percentage.
▪ For a company without a share capital (i.e. a company limited by guarantee),
an EGM may be convened by at least 5% of its members.
▪ Members are required to give notice of meeting to all other members.
Special resolution is proposed – at least 21 days’ notice must be given (S.292)
Ordinary resolution – 14 days’ notice should be sufficient. (S.291)
* Subject to the company’s constitution which may provide for a longer notice.
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Extraordinary General Meeting (‘EGM’)
b) Members
Power of members to convene meeting under S. 311
▪ Members can require the directors to convene a meeting by giving notice to the
directors.
▪ S.311(3)(a): any members holding at least 10% of the paid-up capital or
▪ S.311(3)(b): in the case of company without share capital, any members who
represent at least 5% of the total voting rights
▪ S.311(4): in the case of private company, 5% of paid up capital and 12 months
have lapsed since last meeting.
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Extraordinary General Meeting (‘EGM’)

▪ Requisition for the convening of meeting – giving notice to directors

▪ S.311(2) : requires the requisitioning members to state in their notice to the
directors:
▪ The purpose of the proposed meeting

▪ Text of the proposed resolution

▪ Must sign or authenticate the notice

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Extraordinary General Meeting (‘EGM’)
▪ S.311:
• Directors’ duties (S.312):
▪ To call for EGM within 14 days

▪ Meeting is to be held not later than 28 days after the date of notice

▪ The notice of the meeting shall include the text of the proposed resolution unless under S. 311
(5)(a) – (d)

a) If passed, would be ineffective whether by reason of inconsistency with any written law or the
constitution;

b) Defamatory of any person;

c) Frivolous or vexatious; or

d) If passed, would not be in the best interest of the company.

▪ S.312(4): lengthens the period for the notice of the meeting if a special resolution is proposed
– 21 days (S.292).
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Extraordinary General Meeting (‘EGM’)

▪ S.311:
• Members to convene at company’s expense (S.313):
▪ If directors required under S.311 but do not do under S.312, requisitioning members with at
least ½ of voting rights of all requisitioning members may call for meeting (the EGM).

▪ The EGM must be held within three months from the date the directors received the
requisition under S.311.

▪ Reimbursement by company out of directors’ fees & remuneration

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Extraordinary General Meeting (‘EGM’)
➢ Illustration:

NMO Sdn
Bhd
September 1: Requisition for EGM
September 15: Last day for directors to
call for meeting
Issued 100,000 shares
(each share is entitled to one vote) September 28: Last day for the EGM to be
held
REQUISITIONERS

Assuming the company did not give notice of the meeting

Danny Lenny Mandy to the members by September 15, Danny who was
holds holds holds holding more than half of the voting rights of the
8,000 4,000 3,000 requisitioners may call for the meeting

Total of 15% of the issued

capital of the company
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Extraordinary General Meeting (‘EGM’)
▪ Differences between section 310(b) and section 311

Section 310(b) Section 311

Company with share capital: ≥ Company with share capital: ≥

10% of issued capital 10% of paid up capital

Requirements

Company with no share Company with no share

capital: ≥ 5 members capital: ≥ 5% voting rights

Company, failing which

Preparation of meeting Members
members

Expenses Members Company

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Extraordinary General Meeting (‘EGM’)
c) By court order

▪ Section 314: An application is made under S.314 when it is impracticable or

impossible to convene an EGM as prescribed by the company’s constitution or the
CA 2016.
Application to the court may be made by: director, a member or a personal representative of a member
(S.314(2))

▪ Re El Sombrero (1958)
3 shareholders, Shareholder A and B held 5% of the issued capital each and the balance of 90% was
held by Shareholder C. Shareholders A and B frustrated C’s attempts to call for a meeting by not
attending. Shareholder C applied to the court to call for a meeting.

▪ Phuar Kong Seng v Lim Hua (2005)

2 shareholders, Plaintiff held 51% of the shares and the defendant held 49% of the shares. The
defendant set up another business to compete with the company. The plaintiff attempted but failed to hold
an EGM. There was a deadlock, thus, the plaintiff applied to the court to order an EGM.
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Notice of Meeting
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Notice of meeting

➢ Power to convene a meeting : S.310 – either the Board or member

➢ To whom that notice must be issued? : S.321 – member, director, auditor

➢ How to issue notice? : must be in writing: S.319 – either hard copy or electronic
form or combination of both (refer Constitution)
✓ Hardcopy :sent personally / post to address supplied (S.319(2)(a))

✓ Electronic form: electronic address supplied / publish on a website (S.319(2)(b)) –

co. to notify publication of notice and must state (S.320):
(a) That it concerns a meeting of members;

(b) date/time/place of meeting

(c) in the case of public company, whether the meeting is an AGM

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Notice of meeting : Period

➢ The number of days required to be given to the members depends on whether it

is the company's AGM and the matters being put to vote.
➢ AGM of a public company:

▪ S.316(2)(a) – co. to give at least 21 days’ notice to its members. The company’s
constitution may provide for a longer period.

▪ S.316(3) – provides that meeting can proceed if all members entitled to attend and
vote agree to waive the short notice, in the event the company fails to give the
required notice.
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Notice of meeting : Period
➢ EGM:
▪ S.316 – co. to give at least 14 days’ notice to its members. The company’s
constitution may provide for a longer period. In the event the company gives notice
which is shorter than required, the members may waive the short notice as follows:
Private Company: majority members who hold at least 90% voting shares may waive the
short notice. However, the company’s constitution may provide a higher threshold, but
which does not exceed 95% (S.316(5)(a)).
Public Company: majority members who hold at least 95% voting shares may waive the
short notice
Company Limited by guarantee: majority members who hold at least 95% voting rights
may waive the short notice.
▪ Where the company proposes to pass a special resolution at the members’ meeting:
S. 292(1): at least 21 days’ notice to be given to the members.
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Notice of meeting

➢ All members who have right to attend & vote shall be given notice: failing
which, meeting may be held to be VOID.
➢ Effect of accidental omission to give notice or the non receipt of such notice:
S.316 (6) – not invalidate the meeting.
Cases: Musselwhite v Musselwhite [1962] Ch 964, Re West Canadian Collieries Ltd
[1962] Ch 370

➢ Even if S.316(6) cannot be applied, the meeting may still be validated by the
application of section 582(1) and (2) of the CA 2016.
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Notice of meeting: Contents
➢ Contents of notice of meeting: S.317

▪ the place, date and time of the meeting; and

▪ the general nature of business of the meeting

▪ text of any proposed resolution and other information as the directors deem fit.

➢ Special Resolution: S.292(5) – requires the notice to include the text of the
resolution and also to stipulate that the resolution is proposed as a special
resolution.
➢ S.335: Notice of meeting must also contain statement of rights to appoint
proxy.
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Resolutions
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Types of Resolutions

2 types of resolutions

Ordinary
resolution (S.291)
[14 days, more
than 50%]

Special
resolution (S.292)
[21 days, 75%]
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Ordinary resolution [‘OR’]: S.291

▪ S.291(1) : passed by a simple majority of more than half of the votes exercised by
members or their proxies who are present and voting at the meeting.
Bushell v Faith (1970): Ordinary resolution is passed if approved by “a bare majority”,
that is, more than 50% of the votes casted by members present and voting.

▪ S.291(2): Voting by show of hands – Regardless of the members’ shareholding.

▪ S.291(3): Majority shareholders (> ½ total voting rights) OR is passed by way of a
poll.
▪ S.291(4): Constitution may allow that a matter to be passed by OR may also be
passed by special resolution.
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Ordinary resolution [‘OR’]: S.291

Ordinary Resolution requiring special notice (S.322)

➢ Ordinary resolution which requires special notice is required in the following
circumstances:
▪ The removal of a director before the expiration of his term of office – S.206(3)
▪ The removal of an auditor at a general meeting – S.277(1)
▪ The appointment of auditor in place of an outgoing auditor – S.280(2)
➢ S.322(1): requires the member to give notice of an intention to move a resolution
to the company not less than 28 days before the scheduled meeting.
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Special resolution [‘SR’]: S.292

▪ S.292(1): provides that a SR is a resolution which is passed only if it is passed by

at least 75% of the votes of members present and voting at the meeting or such
higher threshold as may be prescribed by the company’s constitution.
▪ S.292(2): could also passed by way of a written resolution provided so specified.
▪ S.292(3): SR by show of hands – regardless of shareholdings
▪ S.292(4): Majority shareholders (>1/2 total voting rights) – SR is passed by way of
poll.
▪ S.292(5): Where a special resolution is proposed, the notice calling the members
must include the text of the resolution and states the resolution is proposed as a
special resolution.
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How to Pass a Resolution

➢ Resolutions either ordinary or special can be passed during a company’s

meeting.
➢ The act outlines the ways how a resolution can be passed depending on the type
of the said company:
(a) S.290(1): Privates Company – by way of a written resolution or meeting of
members;
(b) S.290(2): Public Company – Meeting of members

(c) S.340: Public Company – Annual General Meeting (AGM)

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AGM of Private Company

➢ For private companies, the AGM is optional.

➢ However, CA 2016 enables members holding at least 5% of paid up capital of a

private company to request the directors to hold a physical meeting where:
▪ It has been more than 12 months since the holding of a meeting which is requisitioned
by members under S. 311, and

▪ The proposed resolution is not defamatory, frivolous or vexatious, or would not be in

the company’s best interest
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AGM of Private Company

➢ For a private company, matters which are normally considered at an AGM will be
dealt with in the following manner:
▪ Accounts are to be circulated within six months of the financial year-end and lodged
with SSM within a month from circulation.

▪ Auditors may be appointed first by the board, and then to be approved by members
through an ordinary resolution (simple majority).

▪ The retirement and election of directors can be decided by the members by way of
written resolution.
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Written Resolutions
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Passing a resolution by Written Resolutions
(‘WR’) of private company (S.297 – 308)

➢ Only applicable to private company (S.297(1))

➢ Initiated:

▪ By the Board; or

▪ Any member of a private company.

➢ Circumstances where WR is not allowed (S.297(2)):

▪ Remove a director before expiration; or

▪ Remove an auditor before expiration

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Passing a resolution by Written Resolutions
(‘WR’) of private company (S.297 – 308)
➢ Eligibility of members (S. 298(1) and (2)):

▪ Members who is entitled to vote on the resolution on the ‘circulation date’ of the
resolution.

▪ Any changes on the member’s right to vote during the course of the day the resolution
is circulated – it shall be the persons entitled to vote on the resolution at the time that
the 1st copy of the resolution is circulated to a member for the member’s agreement.

➢ S. 299: the circulation date of a written resolution shall be the date:

(a) Copies of written resolution circulated to members or

(b) If circulated to members on different days – the first of those days.

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Passing a resolution by Written Resolutions
(‘WR’) of private company (S.297 – 308)
➢ S. 300: Mode of circulation a Written Resolution

(a) Hardcopy

(b) Electronic form

➢ S.301: Circulation of written resolutions proposed by directors

Where the Board proposes a written resolution, the company shall circulate copies of the
written resolution to every eligible member at the same time, so far as practicable in the
manner specified under section 300.

➢ S.302: Circulation of written resolutions proposed by members

CA 2016 allows any member of a private company who holds total voting rights of at least
5% or lesser as specified by the constitution to require the company to circulate a WR.
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Passing a resolution by Written Resolutions
(‘WR’) of private company (S.297 – 308)

➢ Upon the receipt of such request, the company is required to circulate the written
resolutions; unless if it falls under S.302(2),302(4),303.
➢ S. 302(5): Mode of written resolutions by members :

▪ Hardcopy/electronic form;

▪ State the resolution and provide any accompanying statement; and

▪ Be signed or authenticated by the member making the request.

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Passing a resolution by Written Resolutions
(‘WR’) of private company (S.297 – 308)

➢ S.305: Application not to circulate a member’s written resolution

▪ The company or the person who may be aggrieved by the proposed member’s written
resolutions may apply to the court for an order not to circulate the proposed written
resolutions.

▪ The court have power to order the member who requested the circulation of the
proposed written resolutions to the cost of such application.
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Passing a resolution by Written Resolutions
(‘WR’) of private company (S.297 – 308)
➢ S.303: Failure to Circulate
▪ If the company fails to circulate the written resolutions, the members so requested may do
so.
▪ Any reasonable expenses incurred by the members circulating the resolution by reason of
the failure of the directors to circulate a written resolution shall be reimbursed by the
company.
➢ S.306: Signifying agreement
▪ A member signifies his agreement to a proposed written resolution when the company
receives from him an authenticated document – (a) identifying the resolution to which it
relates; and (b) indicating his agreement to the resolution
▪ Effect of signifying is irrevocable
▪ Written resolutions is passed once it reaches the required majority who signify the
agreement.
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Passing a resolution by Written Resolutions
(‘WR’) of private company (S.297 – 308)

➢ How long is the period given to signify a written resolutions?

▪ S.307: if it is moved by members; 28 days from the circulation date or any other period
as specified in the constitution.
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Proceedings
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During the Meeting

▪ Venue & Usage of technologies : S. 327

➢ Simultaneous meeting to be convened at more than 1 venue using technology or method
that allows the members to participate, speak and vote at the meeting.
- Case: Byng v London Life Association Ltd [1990] Ch 170 (CA)

➢ Main venue must be in Malaysia and the chairperson must be at the main venue.

▪ Quorum at the meeting: S.328

➢ Sole company member, 1 member personally present constitute a valid quorum.

➢ More than 1 member company, subject to constitution, 2 or more member or proxy shall be
a quorum.
➢ Quorum required at commencement but if quorum is only 2, must be maintained
throughout.
➢ Should be adjourned if number falls below quorum.
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Proxy (S.334-338)

➢ Refers to a person appointed to attend a company’s meeting on behalf of another

member.

➢ Appointment of proxy: S.334

➢ Who qualifies to become proxy?:

- Previous qualification of becoming a proxy has now been done away with under the new
CA 2016. Now, any member can appoint anyone to become his proxy at a company’s
meeting.

➢ The most important is for the member who wishes to appoint a proxy to comply
with the appointment procedure under S.334(3).
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Proxy (S.334-338)

➢ There is also no maximum number of proxy that can be appointed by a member.

➢ If a member appoints more than 1 proxy. SS 394(2)(b) and 334(2) state the
requirement for the member to specify the proportionate number of shareholding
intended to be represented by each proxy.

➢ Power of proxy: S.334(1) – attend, participate, speak & vote.

➢ Right of proxy to vote:

• S.294(1): by show of hands – if he is the only proxy appointed by the shareholder.

• S.294(2): By poll – if more than 1 proxy is appointed by such member.

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Proxy (S.334-338)

➢ Whether the member who appointed the proxy can still attend the meeting & vote?

▪ The act is silent

▪ Cases: Cousins v International Brick Co Ltd [1931] All ER 229

Ansett v Butter Air Transport Co. (No. 2)(1958) 75 WN

➢ Whether an appointed proxy can be terminated? : S.338(4)

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Chairman : S.329

➢ Chairman of the board shall be the chairperson (subject to constitution)

➢ If the chairman not present with 15 minutes/unwilling to act, other member present
will elect other member to chair the meeting.

➢ S.336 – even a proxy can be a chairman of a meeting.

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Vote
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Voting

➢ Every member is entitled to vote except:

• Member has not paid all calls or other sums payable in respect of his shares;

• Members with no voting rights : S.90(2) & (3)

• Company's constitution suspend the rights of preference shareholders to vote: S.90(4)

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Voting: (a) Vote by show of hands

➢ S.330(1): Unless otherwise demanded; a resolution is passed by counting on show

of hands during a meeting.

➢ S.293(1)(a)(ii): In a company with share capital, each member shall have 1 vote
on show of hands.

➢ A proxy is also entitled to vote on show of hands provided that he is the only proxy
appointed by such member.
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Voting: (b) Vote on poll

➢ S.293(1)(a)(iii)

➢ 1 share = 1 vote

➢ Vote on poll can be demanded at any time

- S.330(1), S 331(b) & S. 337

- Demanded by 5 members present who have voting power; or

- Members with at least 10% of voting power present; or

- Members with at least 10% of paid up-shares present

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Post Meeting
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After the meeting

➢ S.341(1): A company must keep records – all resolutions of members passed

otherwise than at a meeting of members, minutes of all meetings of members and
details of any decision made otherwise than by way of a written resolution
provided to the company with a sole member.

➢ How long to keep the records?: S. 341(2)

➢ Records as evidence of resolutions: S.343

➢ Details of decisions provided by sole member: S. 344

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Cases on Meetings

➢ Musselwhite v Musslewhite [1962]

➢ Re West Canadian Colleries Ltd [1962]

➢ First Nominee (Pte) Ltd v New Kok Ann Realty S/B [1983]

➢ Cousins v International Brick Co Ltd [1931]

➢ Ansett Butter Air Transport Co [1958]

➢ Tuan Hj Ishak b Ismail v Leong Hup Holdings Bhd [1966]

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Thank you!