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Directors' meeting (Resolutions and voting (Model articles provide…
Directors' meeting
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If the votes of the directors are evenly split, article 13 of the model articles provides that the chairman has a casting vote in addition to their own
In large operation companies, the chairman will usually instruct the company secretary to call a board meeting, although any director is entitled to call a board meeting should they wish to do so
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The Chairman
Duty to manage the meeting, ensure that all participants are able to contribute to the meeting, to ensure that the meeting is focused and that all items of the agenda are discussed in the time allocated for the meeting
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For private companies administered in the offshore environment, it is usual to appoint a chairman of the meeting rather than a chairman of the board
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The Agenda
It is unusual for an agenda to be prepared in offshore centres where all of the directors for a company administered on behalf of a client are typically provided by a service providers
For all other board meetings, and agenda will usually be required.
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The agenda is usually circulated with any relevant papers prior to the meeting so that all attendees are fully aware of what they can expect to discuss and consider at the meeting
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Higher priority items are usually placed high up on the agenda so that they are discussed and given due consideration rather than rushed
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Quorum
The minimum number of persons necessary to be present at a meeting for the business of the meeting to be transacted
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Model articles state that the quorum for a board meeting shall be two, unless otherwise fixed by the directors
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Resolutions and voting
Procedure in relation to voting at directors' meetings is usually set out in the articles of association
Model articles provide that the general rule about decision making by directors is that decisions must be taken:
By a majority decision at a meeting or when all eligible directors indicate to each other by any means that they share a common view on a matter
When they take the form of a resolution in writing, copies of which have been signed by each director who would have been entitled to vote on the matter if it had been proposed as a resolution at a directors meeting
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Articles often provide for directors to make decisions without holding a meeting if they are unanimous
Model articles provide that a resolution in writing, signed by all of the directors entitled to vote at a meeting shall be as valid and effective as if it had been duly passed at a meeting
A resolution may be proposed as a written resolution by the directors or the members of a private company
Under Companies Act 2006, a written resolution means a resolution of a private company that is proposed and passed in accordance with the requirements of the legislation
A meeting does not need to be held to pass a written resolution, instead the resolution is circulated to those entitled to vote on it for signature.
Under the model articles, decisions not made in a meeting can only be taken if the eligible directors making the decisions would have formed a quorum at such a meeting
Directors decisions are usually reached following a discussion and do not usually involve voting, this if often the case for companies for which a professional service provider is providing directors
Where a director opposes a resolution, they have a right to have this recorded in the minutes of the meeting
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Record Keeping
Companies Act 2006 states that company records must be kept for at least 10 years from the date of the meeting
If a company fails to comply with this requirement, an offence is committed by every officer of the company who is in fault
Model articles provide that the directors must ensure that the company keeps a record of every unanimous or majority decision taken by the directors in writing
An offshore service provider may be required to maintain records in order to comply with their jurisdictions codes of practice or other legislation
A good standard of record keeping will enable a business to demonstrate compliance with legislation and also assist administrators to understand their clients' needs and to identify risks and opportunities for their business