Company Meetings and Resolutions: What You Need to Know

Effective decision making is critical to the success of any UK limited company or LLP. Company meetings are the forum for high-level decision making (resolutions) that require approval by key directors and shareholders. This article will explain the legal requirements for company meetings, including attendees, notices and notice periods and also minutes. We will also explain the purpose of resolutions, the different types of resolution and how resolutions are passed.

What is a company meeting?

A company meeting is the coming together of a core group of members and directors to discuss and decide on ordinary or special business matters. There are two main types of company meeting: General meetings (including Annual General Meetings – often abbreviated to AGMs), attended by shareholders, and board meetings, attended by company directors.

The procedure and conduct required for company meetings is defined in the Companies Act 2006 (CA 2006), the company’s articles of association and the shareholders’ agreement. Those tasked with organising and running company meetings should familiarise themselves with the law, any specific requirements in the company’s articles and any other relevant agreements to ensure that these are met.

General Meetings

A general meeting is a gathering of a company’s shareholders and can be organised on an annual basis – the Annual General Meeting or AGM – or on an ad-hoc basis for a specific purpose.

General meetings are normally called only as and when required to gather members to make decisions. Under the CA 2006 there is no legal requirement for all private limited companies to hold an AGM – Annual General Meeting – unless it is mandated explicitly within the articles of association. While there is no legal obligation to hold an Annual General Meeting, it is still considered best practice to arrange one each year to discuss the company’s performance in the most recent financial year and look at the year ahead. The exception is traded private companies that must have an AGM within nine months of the day after their financial year-end date.

Public companies are legally required under the CA 2006 to hold an AGM (Annual General Meeting) within six months of the day after their financial year-end.

As stated in the CA 2006, if an AGM is required but it is not held within the required timeframe then “A person guilty of an offence under this section is liable (a) on conviction on indictment, to a fine; (b) on summary conviction, to a fine not exceeding one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences”.

General meetings are typically called by the directors of the company or by several members, normally to:

  • Add or remove powers from directors.
  • Appoint or remove a director.
  • Appoint or remove an auditor.
  • Approve a director’s loans.
  • Approve a director’s service contract.
  • Approve the transfer of shares.
  • Change the shareholders’ agreement.
  • Change the shareholding structure (e.g. to issue more shares or create a new class of shares).
  • Change the articles of association.
  • Change the structure of the company.

For shareholders to call a general meeting, a request must be made by members with at least 5% of the company’s paid-up share capital.

General meeting notice and notice period

A minimum notice period of 14 days is required for private companies when calling a general meeting. Notice must be sent to members, to those entitled to a share on the death or bankruptcy of shareholders and to directors.

Notice can be issued to members and directors in several ways, including hard copy (e.g. a written and posted letter), electronic communication (e.g. email) or on the company’s website, and typically includes the following information:

  • Time, date and place of the proposed meeting.
  • The nature of the business to be discussed.
  • Any resolutions to be discussed and agreed.
  • A statement on the appointment of a proxy.
  • A statement on the procedures for attending and voting.
  • Name or names of those who called the meeting.

In addition to the general meeting notice, a proxy card and attendance card may also be provided.

For AGMs the notice may also include:

  • A copy of the annual report and accounts, including:
    • Strategic report.
    • Directors’ report.
    • Remuneration report.
    • Auditors’ report on the accounts.
    • Corporate governance report.
  • Joining instructions for hybrid and virtual meetings.
  • Shareholders’ statement on proposed resolutions or other business to be dealt with at the meeting.

According to the CA 2006, a shorter notice period is only possible if it is agreed-to by a majority of members who have the right to attend and vote. As the CA 2006 states, this majority must:

  • “together hold not less than the requisite percentage in nominal value of the shares giving a right to attend and vote at the meeting (excluding any shares in the company held as treasury shares), or
  • in the case of a company not having a share capital, together represent not less than the requisite percentage of the total voting rights at that meeting of all the members”.

The “requisite percentage” is 90% or higher for private companies or 95% or higher for public companies.

Board meetings

The management of a company is usually delegated to the board of directors under the articles of association. A board meeting is an official meeting attended by directors to make decisions on behalf of the company. Board members are under no legal duty to hold board meetings but it is considered best practice to do so regularly. The first board meeting is typically held within one month of the company’s incorporation, i.e. registration, to discuss the goals of the business and the roles of each director. The following list is not exhaustive and will depend upon the needs and priorities of the company, but items for discussion at the first board meeting may include:

  • Administration, such as arranging business insurance.
  • Annual accounts and Confirmation Statement filing deadlines.
  • Appointing an auditor, accountant, chairperson or company secretary.
  • Business strategy.
  • Duties and responsibilities of directors.
  • Employees or contractors.
  • Financial and accounting matters (e.g. budgets, operating costs, bank accounts, loans, investments, and employee remuneration).
  • Health and safety.
  • Licences and certifications necessary for business operations.
  • Reviewing requirements for business premises.
  • Share capital and share certificates.
  • Tax registration.
  • The accounting reference date (ARD).

Minutes of meetings

Minutes provide an important record of events in company meetings and ensure that all stakeholders have the same understanding of what was discussed and agreed. Minutes of general and board meetings must be recorded appropriately and may include:

  • Apologies for non-attendance.
  • Company name.
  • Decisions reached for all of the proposed resolutions.
  • Issues raised.
  • Meeting time, date, and location.
  • Names of all attendees and proxies.
  • Registered office address.
  • Summary of the proceedings.
  • The resolutions discussed.

Once drafted and signed by the director or company secretary, copies of the minutes must be distributed to all company members. Furthermore, a copy must be held in the statutory register of the company at the registered office or Single Alternative Inspection Location (SAIL) for at least ten years.

Company resolutions

There are four types of company resolution, as follows:

1. Ordinary resolution

To pass, a simple majority must agree to an ordinary resolution of members or a class of members (i.e. above 50% for the resolution). Ordinary resolutions are used for many purposes, including to:

  • Amend the powers in the articles of association and/or shareholders’ agreement.
  • Appoint or remove a director or company secretary.
  • Approve directors’ loans.
  • Approve dividend payments.
  • Approve the transfer of shares.
  • Amend a director’s employment contract.

2. Special resolution

To pass, a special resolution of members (or a class of members) must be approved by a majority of at least 75%. This type of resolution is reserved for important decisions such as:

  • Amending the articles of association.
  • Amending the name of the company.
  • Approving a new share class.
  • Reducing issued share capital or allocating more shares.
  • Voluntary liquidation.
  • Winding up decisions.

3. Written resolution

Written resolutions are used if a general meeting is not necessary to pass an ordinary resolution or special resolution.

4. Directors’ resolution (or “board resolution”) and directors’ written resolutions

Directors’ resolutions or board resolutions are formal decisions taken by company directors. These can be taken at board meetings or in writing. Most directors’ resolutions require a simple majority (i.e. 50% or more) to pass, assuming this has not been amended in the articles of association.

Passed resolutions must be filed with Companies House within 15 days of approval.

Final words

Complying with obligations for company meetings and resolutions requires up-to-date and well-defined policies, procedures and training. For assistance with your company meetings and resolutions, speak to a specialist in company formations. Company formation specialists understand the legal compliance requirements for meetings and Companies House filing. By investing in the appropriate training and compliance procedures, you can relax, knowing that you and your company are within the law and not at risk of penalty or prosecution.

Uniwide Formations offers many services, including assistance with company meetings, resolution compliance and services for actions that the company may resolve to take, such as:

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