Board meetings
The usual procedures at meetings of directors in the majority of offshore jurisdictions are entirely governed by the company's constitutional documentation except for how the minutes of any meeting shall be recorded and subsequently signed
Meetings by the majority of CSPs are held when required (i.e on an ad hoc basis). However it is not uncommon for some types of companies (for instance those that are regulated to hold monthly or quarterly meetings).
A director and the secretary on the requisition of a director can summon a meeting of the directors at any time
The constitution documentation may make provisions for the board meeting to be held by telephone
Constitution documentation may also provide for a resolution, in writing, signed by all the directors to be valid, as if it had been passed at a meeting of the directors. Transacting business by way of a written resolution of all director can be done in both private and public companies in lieu of calling a board meeting
For shareholder meetings the position is different and only private company members can transact business by way of written resolutions
Constitution documentation in most offshore jurisdictions will also make provision for the quorum of directors necessary for the transaction of business at a board meetings. They do not usually refer to any notice period for calling such meetings. It can often be the case that very little notice is provided to directors when an immediate decision is required
Browne v La Trinidad (1887)
Directors sometimes appoint a chairperson for a fixed term to add continuity to the proceedings of board meetings or may prefer to appoint a chairman on a meeting by meeting basis
The chairperson may or may not have a casting vote depending on the terms laid down in the company's constitution documentation
The constitution documentation will usually refer to any restrictions that may be placed on a director where they have a personal interest in the transaction being voted upon at a board meetings. It is usual practice that the director is required to declare their interest at the beginning of meetings and they may be permitted or even precluded from voting
The constitution documentation will also provide guidelines for action to be taken if the number of directors falls below the quorum to allow the board meeting to be held and resolutions considered and voted upon. In these types of situations the directors may request that the secretary calls a GM to appoint the new director by way of an extraordinary resolution
Notice and agenda
In most offshore jurisdictions it is not usual practice for formal notices and agendas to be prepared before holding a directors meeting
Administrators of offshore CSPs usually prepare draft board minutes before the meeting when the topics to be considered and noted upon are in the ordinary course of business and when it is believed that the topics will be approved by the board of directors
It is also usual practice that the directors at the board meeting may make amendments to the draft minutes if necessary and these minutes may well be signed by either the chairperson of the meeting or by all the directors attending the board meeting after the amendments have been made
In some instances where complex issues are to be discussed and approved, agendas may be required to guide the chairperson and the board through the various topics such as a purchase of a high net worth property or investments with possible medium-to-high risk problems
Contents of the first meeting of the board of directors
While the incorporation documents to incorporate the company identify and select the promoter and subscriber prior to incorporation and whilst it is necessary to prepare the companys application documents to nominate promoters to take on the roles of subscribers and future directors, all of these details need to be confirmed formally at the first meeting of the board of directors
Matters to be confirmed include
The full name of the company
That a quorum is present and note apologies from those absent
The incorporation of the company by tabling the certificate of registration
The standard documents of the company by tabling the memorandum and articles of association
The appointment of the direct directors of the company by tabling the letters of consent
The first members of the company
The address of the registered office
Matters to be resolved or approved include
Resolve the appointment of the company secretary
Resolve to approve the financial year end of the company
Adopt the common seal of the company
Note the directors present, the appointment of a chairperson of the meeting
Resolve the confirmation of its audit status
Resolve its tax status
Alloting shares and approving the issue of the share certificates
Resolve the appointment of bankers
Resolve the appointment of legal advisors and / or investment advisers
Resolve the appointment of other agents as appropriate
Resolve other business such as the acceptance of additional assets into the company
Resolve the date of the next meeting (if known)
Decision making at company meetings
Importance of the decision making location
With video conferencing becoming common practice it is recommended that the chair of these meetings is located in the offshore jurisdiction where the company is or was incorporated to provide evidence that the company is making the decision in its offshore jurisdiction so that the tax status of the decisions and the company is not questioned
Board meetings
Resolutions are passed using a simply majority vote
The board's chairperson usually has a second casting vote in the event of a tie but it is usual practice for this to maintain the status quo if this vote is needed to make up the majority views of the board
Resolutions carried at directors meetings can include the following items
appointment and resignation of directors
appointment and resignation of company secretary
change of registered office address of the company in the same jurisdiction
transfer and issue of company shares
appointment of bankers, legal advisers
purchase of assets
acceptance and completion of documents and contracts entered into by the company
approval of financial statements
approval of the use of the company seal
acceptance of loans
charging of company's assets
sale of company's assets, unless considered detrimental to members
Members meeting
Under CA2006 resolutions passed at GMs can be classed as either ordinary or special resolutions
These resolutions are usually distinguished by the period of notice required and the percentage needed to be in favour in order to carry each resolution
Constitutional documentation of a company may state the kind of resolution that's required as otherwise the decision may not be valid
Ordinary resolutions
Any resolution that is not identified in the notice as a special resolution is an ordinary resolution
The normal method for securing members' approval for routine business transacted in GMs
Resolutions carried at AGMs are usually ordinary resolutions although there are instances where special resolutions are considered and approved at an AGM
Follows common law principles and may be carried by simple majority of votes at the meeting
Examples of ordinary resolutions to be considered at GMs could include to
Approve the financial statements of the company
Approve the payment of a dividend
Appoint or re appoint directors
Accept the resignation of a director
Approve the payment of directors' fees
Appoint or re appoint auditors
Accept the termination or resignation of the auditor of the company
Approve the payment of audit fees
Confirm the tax status of the company
Special resolutions
The majority of offshore jurisdictions will hold GMs in order to pass a special resolution. It is not unknown for the AGM of a company to be closed and a GM held immediately after the AGM, assuming that due notice has been given and that a quorum is in place
Needed when it is described as such in the notice to the members of the company or is to be carried by a majority of 75% of votes cast at the GM
If required, depending on the rules of the offshore jurisdiction, a signed copy of the special resolution is usually delivered to the Registrar of Companies within 15-30 days from the date of the GM
Used for most of the major decisions affecting the structure of the company such as
Alternation of a company's constitutional documentation
Change of the name of the company
Change in the definition of a meeting, to allow for circular resolutions
Change to quorum
Change to process of issuing shares
Change to un-certificated shareholdings
Reduction of capital
Winding up of company
Appointment of liquidator
Written or circular resolutions
Company law and constitution documentation in the majority of offshore jurisdictions usually provide the directors with the necessary authority and/or approval to make decisions without holding a meeting as long as they are unanimous with their decisions
As It is quite usual for the draft written resolutions to be circulated and signed by the directors of the board at different times, the decision of the board is only valid when all the directors have signed the circulated minutes
If all the directors of the company have indicated to each other, by any means, that they are in agreement with the topics to be considered, it is not uncommon practice that administrators of CSPs take the practical viewpoint that the board have approved the matters in hand
Any complex matters and any matters that may be contentious are not completed until all the directors of the company have approved and signed the circulated minutes
CA2006 allows for written resolutions by the directors or by the members of a private company