Day 131 Member’s meeting cont.

Member’s meeting cont.

We have discussed the different types of member’s meeting and the specific groups that may call it. However, there are still several issues refer to this topic, including the requirement of proper notice, progress of conducting the meeting, member’s voting and validation of irregularities.

According to section 249J(1) Corporations Act, each individual member who is entitled to vote and each director must be given notice about the member’s meeting. The s.249L further specifies the content of the notice, which should cover the place, date & time of the meeting; the content will be discussed in the meeting; proposed resolutions; procedure to appoint proxies. Generally, the listed company must give the notice 28 days prior the meeting, and unlisted company will provide the notice with 21 days. These provision are regulated in S.249HA and 249H CA, but with some intrinsic differences. If 95% of the members vote to agree with a shorter period of notice, it can be adjusted in unlisted companies. Except for the meeting relates to appointing/removal directors or auditor in a public company. In contrast, the statutory law prohibits the listed company to vary its notice period shorter by changing the constitution. In addition, the directors have the duty to disclose all relative matters to members in a clear and concise format, where the member as an ordinary investor can be properly instructed and comprehend the issues to be voted on the meeting. (s.249L) In other words, the notice must help the member to understand the topics to be voted, without any uncommon amount of knowledge required as an ordinary investor. S.249T and 249S explained the quorum and the location of the meeting. That the replaceable rule suggested there must be at least two members attend the meeting in order to make it valid. Furthermore, the meeting can be held in multiple places using technology. The individual members would usually appoint a nominated person to vote on behalf of them (S.249X). In most cases, this proxy is the chairperson who convenes the meeting.

The meeting generates resolutions on either show of hands or poll.(S.250J (RR)) Unless the constitution prohibits poll, it can be demanded immediately after the show of hands of prior the decision by five members had the voting right or any member has more than 5% shares. The advantage of the poll is the resolution is made on the base of share weights(one vote per share) instead of count of hands.

The member’s meeting is the fundamental part of a company’s management process, hence it is crucial for us to know the relative legislation of it.