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Company Meetings and Decision Making - Coggle Diagram
Company Meetings and Decision Making
How companies make decisions
Decisions of a public company
Must be made via resolutions at a meeting
Unanimous assent rule can be used but not practical in larger public companies
Decisions of a private company
Can be made by a resolution at a meeting
By WR
By unanimous assent
Resolutions
A resolution is simply a vote under which the company resolves itself to a particular course of action
Votes are calculated different based on whether a resolution is at a meeting or if the WR procedure is used
Where the resolution is tabled at a meeting, the requisite majority is calculated based on the votes cast by those eligible to vote. The votes are calculated based only on those who actually vote
Where a WR is used, the requisite majority is calculated based on the voting rights of the total number of members eligible to vote, not just those who actually do vote
Ordinary resolutions & special resolutions
An ordinary resolution is passed by a simple majority. If there is a 50/50 split, the resolution fails
A special resolution is one that is passed by a majority of not less than 75%
If a resolution is not specified as ordinary or special, it will be classed as ordinary
Written resolutions
CA2006 allows private companies to make a decision via a WR
Any resolution that can place at a meeting can also take place as a WR except a resolution to remove a director or auditor before their period of office has expired
Unanimous assent
Where all the members of a company know that they agree on a matter, common law has allowed companies to make decisions by unanimous asset
If all the members agree on a matter, the decision will be validly made even if no meeting takes place and no resolution is passed
A wide range of decisions can be taken by unanimous asset and it can take the place of almost any resolution
Where statute states that a resolution is resolution, then whether the unanimous assent rule can be used will depend on whether the provision express or impliedly aexlcude the operation of the rule
Restrictions
Will not apply where stature requires that a decision be taken at a meeting
Can only be used where
The members who assented had appropriate or full knowledge of the matter in question
All the members who ave their actual assent
The rule cannot be used to make a decision that could not have been made by a resolution