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Shareholders - Coggle Diagram
Shareholders
General meetings
302 - called by directors (board resolution at board meeting)
307 - need to give 14 clear days notice (unless short notice procedure)
If directors do not call, shareholders can call themselves
303(1) - shareholders holding together not less than 5% voting capital can request board to call a GM
304 - directors must call GM within 21 days (and give 14 days notice to shareholders) for a date not more than 28 days after date of notice
305 - if directors fail, shareholders who submitted request can call themselves to be held within 3 months of the date of request receipt
305 - can recover reasonable expenses
(Public companies only) required to hold an AGM
Directors present annual report about company performance/strategy
Shareholders with voting rights can then vote
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Voting
Ordinary resolution where type of resolution required not specified in legislation or articles
Written resolutions
288 - can be used for ordinary and special resolutions
Have same affect as passed in a GM
- Send to all eligible members entitled to vote
- Time limit of 28 days (sufficient number of shareholders need to vote in favour (otherwise resolution not passed))
Cannot be used to remove director / auditor
Voting at GM
14 days notice to all shareholders entitled to attend GM
Short notice allowed if members are in agreement
Quorum = 2 shareholders (unless single member company)
MA 42 - voting in a GM must be show of hands (unless poll demanded in articles)
Informal decision making
Duomatic - established that informal resolutions agreed by all shareholders outside of a formal meeting are valid and binding
Shareholder approval needed:
- Amending company articles
- Granting director long term service contract
- Making loan to a director
- Removing director from office
Shares
Allotment
Issue
112(2) legal title to shares issued once shareholder registered in company's register of members
Transfer
A contract between existing shareholder and purchaser for the sale of shares (company not a party to contract)
Allotment
Contract between company and new shareholders - company agrees to issue new shares in return for paying subscription fee
558 - shares allotted when person acquires right to be included in company's register of members
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Variation of share rights
630 - vary:
- in accordance with articles
OR
- where 75% in value of shares of affected class consent in writing
OR
- special resolution at shareholder meeting of affected class
Shareholder agreement
Private contract between shareholders
Only binds shareholders party to it
New shareholders can be added by Deed of Adherence
Russel - agreement by members in a shareholder's agreement that they will not support it is binding
Can be varied if all shareholders agree
Can be enforced via an injunction