Legal Notice: General Meetings (second part)

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This is the second part of a guidance note (watch part one here) relating to information and advice on the conduct of general meetings of incorporated golf clubs.

Right of members to appoint proxies

All members have the right to appoint a proxy to exercise any or all of their rights to attend, speak, demand or join in the requirement of a poll and vote at general meetings as set forth in the Companies Act 2006 (the “Act”). This prevails over any contrary provision of the company’s articles of association. It is very common for societies to provide that members can appoint the president as their proxy. However, it is important to note that unless a ballot is called, the Chair (if acting as proxy for more than one member) will only have one vote for or against (or he receives conflicting instructions from the members for whom he is acting as proxy, one vote for and one vote against) the motion by a show of hands, regardless of the number of members for whom he is acting as proxy. It is usual for the chair to call for a vote if he thinks the resolution would be defeated on a show of hands (but not on a vote) under his proxies. The Act is silent as to the duties of the President in this role and does not require him to call a poll. However, common law provides that the chairman has a duty to ascertain the true meaning of the meeting. This includes the obligation to demand a poll (or join a demand made by another shareholder) if he has been appointed shareholder proxy and is aware that a poll vote may produce a different result. by a show of hands.

If the Chair, acting as proxy, does not have specific voting instructions on a particular issue, he or she must consider the member’s intentions. For example, if an adjournment is proposed and the purpose of the adjournment is to defeat a resolution, the chair must cast the votes of the proxies who asked him to vote against the resolution in favor of the adjournment proposal.

In the case of amendments to resolutions, the chair, acting as proxy, should vote against an amendment if instructed to vote in favor of the resolution. The issue is more complicated if the chairman is tasked with voting against a resolution because there is no way of knowing what the shareholder’s attitude would be towards the amendment. In this case, the president often abstains during these votes. If he has discretion on how to vote on a resolution, this also applies to amendments.

Deadline for appointing a proxy

Societies are permitted to set a deadline by which a member must submit their proxy for it to be valid. Companies are likely to include a time limit in their articles of association.

Section 327(2) of the Act provides that any provision of the company’s articles of association which requires the appointment of a proxy to be received by the company more than 48 hours before the time of the meeting is void. When calculating this time, Article 327(3) provides that part of a day which is not a working day should not be taken into account.

Ending a power of attorney

Unless notice of termination of a proxy’s power is received by the company prior to the commencement of the meeting, the shares of the proxy at a meeting are valid. A longer period, which may be up to 48 hours before the meeting (excluding part of a non-working day), may be specified by the company’s articles of association.

Voting Instructions

Proxy instruction forms must provide the options to vote “for” or “against” each resolution and may, but need not, have the option for proxy members to register their protest to a resolution without actually voting. counter, allowing the company time to address important concerns. The “vote withheld” is not a vote of right and should therefore not be taken into account in the calculation of the proportion of votes for and against the resolution. Sometimes the “discretionary” box is included to allow the proxy to vote as they see fit. The proxy will have discretion where no specific voting instructions have been given by the member in any event and is therefore still relatively unusual. The proxy must vote in accordance with his instructions. The content and delivery of proxy notices are generally defined in the company’s articles of association. The standard articles take an approach requiring certain information to be included in proxy forms and allowing the company to require the use of a particular form, rather than prescribing the actual wording of the forms.

Quorum

For the meeting to be valid (and for the resolution submitted to the meeting to be validly adopted), the meeting must have reached a quorum. The law requires that, unless the company is a sole proprietorship, in which case a quorum of one person is sufficient, at least two qualified persons must attend a general meeting in order for that meeting to have a quorum. A company’s articles of association may fix the quorum at a higher number if desired. The term eligible persons includes a natural person who is a member of the company and a person appointed as a proxy of a member. The law therefore establishes that a quorum can be reached if two proxies are present for separate members (but not if they are proxies of the same member), rather than the members themselves.

A company’s articles of association should include procedural provisions that deal with practicalities such as what would happen if no quorum was present when the meeting was to begin. For example, if no quorum is achieved within half an hour of the scheduled meeting time, the meeting will be adjourned until the same time and place next week, or such time and place determined by the administrators.

Poll votes

Voting at general meetings can take place either by a show of hands or by poll.

Members have the right to require a vote by ballot (rather than a vote by a show of hands), which increases the requirement to increase the vote from the required percentage of people present at the meeting to a required percentage vote of all those present and voting in person. and by proxy.

The Act provides that the articles must at least provide that the following persons may demand a poll:

1. Five members present in person or represented and entitled to vote; Where

2. Any member or members present in person or represented by proxy, holding either at least one-tenth of the total voting rights, or at least one-tenth of the total paid-up sum of all the shares giving the right to attend and vote (articles 321 and 329 of the law).

A company’s articles of association may provide that the effect is not more restrictive on members’ rights, for example, they may allow others such as the chairman to require a ballot (i.e. , which he may prefer if he has been appointed to act as a proxy for more than one member). For example, standard bylaws provide that two or more members have the right to vote on the resolution or that the directors or the president can also call a poll.

Minutes of the meeting

Section 355 of the Act requires companies to keep records including the minutes of all general meetings for a period of ten years from the date of the relevant meeting (rather than for an indefinite period as was the case under the 1985 Act). The requirement also extends to minutes of class meetings (eg junior or ladies sections).

Where a company passes a special resolution (or a resolution affecting the incorporation of a company), it must forward a copy of the resolution (and an amended copy of the articles of association if amended by such resolution) to the Registrar of Companies within 15 days from the date on which the resolution was passed. If a company fails to do so, the company, and each officer of it who is in default, commits an offence.

Electronic Communications

Members may also participate in the meeting electronically. For most golf clubs, the relevant means will usually be email. The Company may serve notices and Members may send communications electronically where a Company has provided an e-mail address (or number) in a notice calling a general meeting or in, in the case of a proxy, a power of attorney or an invitation to power of attorney. The company may also notify the notice of meeting by means of a website, provided that the members are informed of the presence of the notice on the website in accordance with certain formalities (provided for in article 309 of the ). This notification can be made in paper form, by e-mail, when the member has specifically agreed to accept this form of communication.

When a company has indicated an e-mail address in a notice of meeting, it is deemed to have accepted that any document or information relating to the deliberations of the meeting (including proxy forms) be sent to this e-mail address. (subject to any conditions or limitations specified in the notice).

You are advised to observe the following procedures when using electronic communications:

· Blank electronic proxy forms should not be posted on a company’s website as such proxies with unclear signatures are often rejected by registrars; and

The Business shall notify Members who choose to receive communications electronically that the Business’ obligation is satisfied when it transmits an electronic message and that it cannot be held liable for any independent failure to transmit of his will. He also recommends that when the company becomes aware of a delivery failure (and subsequent attempts do not remedy the situation), it reverts to sending a hard copy of the power of attorney by courier to the last address. known to the addressee within 48 hours of the original. attempt.

· Electronic proxy forms should contain clear instructions as to the address to which the proxy form should be returned. The design of proxy forms should be carefully considered, and any email address (which extends to telephone numbers) which appears in the proxy but which is not intended for use by shareholders in communications with the company (such as the filing of proxies) is specifically limited in its application. ICSA suggests that a solution to this problem could be to ensure that these addresses (or telephone numbers) do not appear on the proxy form.

For further advice on your club’s general meetings or any other legal matters relating to your club, please contact NGCAA CEO Alistair Smith on [email protected] or 01886812943

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