Company law - voting rights

"Rob graham" wrote

Have the Table A provisions on voting been expressly omitted by the company's Articles??

There doesn't appear to be any reference to an express omission in the Articles. None of the directors knows why this happened and it seems to me that when the company was set up it was given bad advice in this respect.

The question now is how do we go about securing a valid vote on how the voting rights should be established? It's a cart and horse situation.

Rob

"Rob graham" wrote

Then if the "Table A" provisions haven't been excluded - they will apply, won't they? So there's no problem??

"Rob graham" wrote

If you wish to change the voting rules away from those specified by "Table A", then the valid vote to do this would simply be done under the current "Table A" rules - wouldn't it?

Yes. That all makes sense. However, having Googled for Table A I note the following:- (46) A resolution put to the vote of a meeting shall be decided on a show of hands unless before, or on the declaration of the result of the show of hands a poll is duly demanded. Subject to the provisions of the Act, a poll may be demanded.

Can you enlighten me as to what a poll is compared to an actual vote? I guess that's it's a voting paper-based vote rather than a show of hands. If so, is it one shareholder one vote or one share one vote? If it's the former, I can't see how a multi-shareholder can use his greater voting power.

Rob

"Rob graham" wrote

One share one vote.

You have not said how old the company is, and therefore it is unclear about which version of Table A applies here.

If it is the latest version consider using the ability to pass shareholder resolutions without holding an actual meeting, that is, by written resolution. That is normally far easier than calling a meeting just to pass the resolutions that are needed .... assuming of course that all shareholders agree to the matter.

"Yes it does. It has the only context in which swing can be calculated: Conservative - Labour." - Meaningless drivel : David Boothroyd 13/05/05

I believe the company was bought off the peg in 1999. So is the age 6 years or since it was first founded? How long ago did Table A change?

Rob

"John" wrote

Presumably, if *all* shareholders agreed on the issue, then Rob wouldn't need to ask whether it is "one share one vote" or "one shareholder one vote" - the result would be the same (100%) either way?

Yes indeed. But there is a sensitive voting issue coming up and it is very unlikely that all will vote one way. So we need to have a cast-iron rule in place first. It's seeming to me, from information I'm steadily gleaning from the above replies, that by default we have a one share one vote system in place (which is actually what we want!). John has replied re the age of the company and which Table A is relevant, but he hasn't yet replied to my reply, so I'm not sure about this yet.

Rob

Certainly for a company formed in 1999 the version of Table A that will apply will incorporate the ability to pass resolutions in writing rather than by having a meeting, namely :-

"53. A resolution in writing executed by or on behalf of each member who would have been entitled to vote upon it if it had been proposed at a general meeting at which he was present shall be as effectual as if it had been passed at a general meeting duly convened and held and may consist of several instruments in the like form each executed by or on behalf of one or more members."

However, as already pointed out, if the matter is contentious then it is not likely that all members will agree to sign a written resolution. Accordingly an EGM will be needed to pass the required resolution(s).

But what percentage of the shareholdings are in favour? Can you get holders of 95% or more to agree to a short notice meeting? If not then do ensure that the correct length of notice is given in order to ensure that the EGM is legal.

We could give them say 1 month's notice of an EGM. But as I understand it, if they don't all turn up, someone at the meeting could demand a poll and we would then hold one for say a month's time and require that the papers were returned by a certain date to be valid. Then if they weren't prepared to sign they would lose their vote. Is one month long enough for notice of an EGM?

Rob

Rob, that is not the way it works. A Poll would be demanded at the EGM, and those there in person or by proxy would be entitled to vote. The result would be known very quickly. Even in a PLC situation, with hundreds of shareholders at an AGM, the result is usually known the day of the meeting. With a private company the result would be almost instant.

The provision is there in company law for this sort of reason. Say a company has five shareholders, one holding 80% of the shares and the others 5% each. A vote is taken on a resolution ... say it is carried

4 votes to 1 ..... the one against being the person who holds the 80%. That person would then clearly demand a Poll, and the outcome would probably be 20% in favour, 80% against, motion lost.

Very basic question ... what exactly are you needing an EGM for? That is, what exactly do you propose to be the business of that meeting?

I ask that because you started this thread saying about the need for clarification of voting, but that is now hopefully clarified by Table A. So why do you need a meeting at all?

Right. You guys have been very helpful indeed. However, I cannot at this time say what the purpose of the meeting is to be because as someone once said, even walls have ears, and you never know who's reading these posts.

Technically I don't think we do need a meeting, especially because I believe that, now I have had voting procedures explained to me, I think a poll would provide the 'right' outcome. However, given the reasons for the company being set up in the first place (which you don't know), it would be unreasonable to shareholders living at a distance not to be given the opportunity to discuss the issues. This is a personal view and may not be shared by the other directors.

Much of what I have been asking would have been known by our erstwhile secretary but he resigned some months ago and the above issues have only recently come to light.

To go back to practical matters, is it satisfactory to send to all the shareholders a voting or proxy voting paper together with an announcement of a meeting, and an announcement of why the meeting is to be held? This could be held immediately after the AGM to make it convenient to as many as possible. The announcement would need to indicate that there may be a poll demanded at the meeting, so that voting papers could be returned in readiness.

Rob

Rob, you really do need to read the relevant copy of Table A, much of which I suspect has been incorporated into the company's Articles. Or if there are no Articles filed at Companies House then Table A in its entirity will apply.

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Yes, you're right! I think I'm OK now. Thanks very much for your (and Tims') inputs.

Rob