Further changes to the Companies Act 2006 (the Act) come into force on 3 August 2009 as a result of the implementation of The Company (Shareholders' Rights) Regulations 2009. These changes relate to Part 13 (resolutions and meetings) of the Act and will affect general meetings of which notice is given on or after 3 August 2009.
Certain changes apply to all companies, but the majority of the changes only apply to traded companies, that is, those with shares admitted to trading on a regulated market in an EEA state (this includes the main market of the London Stock Exchange, but not AIM).
An overview of some of the main changes is set out below:
Changes affecting all companies
- Shareholders' power to call general meetings - The members of all companies may now require the directors to call a general meeting provided that members holding at least 5% of the total voting rights make such a request.
- Proxy votes - The mechanism by which proxies may cast votes has been clarified and there is also now a statutory requirement that the proxy must vote in accordance with the instructions given by his appointer.
- Multiple corporate representatives - The mechanism by which multiple corporate representatives appointed by a single corporate member may cast votes has been clarified to make it clear that they can vote in different ways, provided they do so in respect of different blocks of shares.
Changes affecting traded companies only
- Notice period for general meetings - Traded companies may now only call a general meeting (other than an AGM) on 14 days' notice if they comply with conditions set out in the Act. In order to be able to do this, the company must pass a special resolution approving the shorter notice period no sooner than the company's last AGM and also offer facilities for electronic voting. If these conditions cannot be complied with, 21 days' notice must be given for all meetings of the company.
- Contents of notice of general meetings - Traded companies must now provide additional information in the notice of the meeting, including details of a website address containing further information and various statements about shareholder rights. The company must also publish information relating to the meeting and details of share capital and voting rights on a website in advance of the meeting.
- Members' power to include items for the agenda at annual general meetings - Members holding at least 5% of the total voting rights or at least 100 members may require the company to include an item on the agenda at the AGM, provided that the matter is not defamatory, frivolous or vexatious. The company must bear the cost of informing other shareholders of such a request if it is received before the end of the financial year that precedes the AGM.
- Electronic address - Traded companies must provide an electronic address for the receipt of proxy forms.
- Questions at meetings - At general meetings of traded companies, members now have a statutory right to put questions to the company which it must answer, unless an answer would be disruptive to the meeting, involve the disclosure of confidential information or the company has already answered the question on its website.
- Results of a poll - In addition to the current obligation for traded companies to publish the results of all poll votes taken at any general meeting on a website, traded companies must also include details of the number of votes cast and the proportion of the total share capital represented thereby.
View the final form of The Companies (Shareholders' Rights) Regulations 2009 (web page).