Holding a company meeting?

Here’s what you need to know

There are two types of companies under Australian law refer to s45A CORPORATIONS ACT 2001 (Cth): proprietary or private companies and public companies. The fundamental difference between them is that a proprietary company can have no more than 50 non-employee shareholders and must not engage in any fundraising activity that would require the lodgement of a prospectus.

A public company may have more than 50 non-employee shareholders and is allowed to engage in fundraising activities that require the lodgement of a prospectus. Only a public company can be listed on the stock exchange (ASX).

Here we are focussed on proprietary or private companies incorporated in Australia. Following are the guidelines recommended to hold a private company meeting. Directors, or Officeholders, must consult their company constitutions to ensure specific instructions are not stipulated.

Proprietary or private companies have less financial disclosure obligations than public companies see s292 CORPORATIONS ACT 2001 (Cth). They are not required to hold an Annual General Meeting (AGM) and can make or pass shareholder resolutions without a general meeting.

However, activities requiring shareholder approval necessitate a resolution to be passed by the shareholders holding the majority of voting shares at a shareholders’ meeting or ratified by all shareholders by way of a written resolution.

The requisite majority is usually a simple majority but can be set a 75% for certain matters.

The directors must request the meeting within 21 days after the meeting application is given to them and the meeting must take place within two months after the request is given to the company.

Essentials of an Effective Meeting

An agenda should be written and circulated, including business items and
undertakings

For a meeting to be valid, the following requirements must be fulfilled

The meeting must be suitably convened by the right authority
Proper notice must be served
A quorum must be present
A chairperson must officiate
Minutes must be kept

The agenda is the list of items to be discussed during the meeting. Having an established and focused board meeting agenda helps the board maximize accuracy, efficiency, and productivity. Board meeting agendas include items for managing routine business and for undertaking various projects.

The business arising will dictate the items to be itemised on the agenda, which should also list:

Reviewing and approving the agenda
Confirming there is a recorder and having minutes taken
Reviewing and approving minutes from the previous meeting
Correspondence
Financial report
Calling for motions, a seconder and voting on items when applicable
Adjournment

The Board Chair maintains focus on what is best for the company by enabling suitable board leadership and authority and sets the proficiency of the meetings, dealing with motions and maintaining procedure.

The Board of Directors assumes a legal responsibility to administer a corporation. Fulfilling that accountability encompasses many distinctive roles and responsibilities. Each board member brings unique strengths, aptitudes, and capacities to the board.

The Secretary is responsible for the preparation and planning of the meetings, such as programming, agendas, presentations, management liaisons, and usually taking the minutes of the meeting.

The Treasurer is the person who presents financial reports to the board. It is important that these reports and budgets are clearly understood by all the members they are responsible for keeping a check on the finances of the organisation.

Voting

During a general meeting, resolutions are usually passed by a simple majority on a show of hands unless the constitution directs otherwise. A shareholder who is entitled to attend and cast a vote at a general meeting may appoint a person as their proxy to attend and vote for them at the meeting. Appointing a ‘proxy’ is to allow someone else to do something on your behalf. A board director or member prevented from attending a meeting may empower a proxy to speak or vote on their behalf.

Minutes

A company must record and provide minutes of general meetings and the resolutions deliberated, which the shareholders are entitled to inspect.
The minutes should contain the following:

Names of attendees and absentees, noting whether the meeting had a quorum
Approving the minutes from the prior meeting
Order of business
Unfinished business
Names of all persons reporting and dissenting
Voting results
Unsolved items from past board meetings, such as new business and reports from the executive director, treasurer, finances, committees if any additional business, and future business.
Closing, including the time of adjournment
Date and time set for the next board meeting
Signatures by the secretary and board.

The minute books of a company are commonly conserved at its registered office address or principal place of business.

Virtual Meetings

Directors should consider whether holding a meeting using virtual technology is applicable in the circumstances, considering the needs of the company and whether there are or may be any restrictions, such as COVID-19, in place at the time.

ASIC considers that virtual technology is a valuable tool for addressing the challenges of COVID‑19 and ensuring continued commitment in meetings. To meet these challenges, entities may choose to hold either:

‘virtual’ meetings (a meeting where all members participate via online facilities); or
where circumstances permit, ‘hybrid’ meetings (a physical meeting linked with online facilities that allow remote participation).

See or download:

By Gregory Atamian JJN Associates – Accountants Tax Advisors

The content and the references made in this article are correct as at the publication date and are for general information and should not be relied upon as advice. If you wish to seek particular advice, call us on 02 9997 4000.