CORPORATE LAW

BBB 3233

LECTURE 9: MEETINGS AND RESOLUTIONS

 TOPIC OUTLINE
• General Meeting of a company
• Notice of meetings
• Procedures at Meetings
• Chairman
• Voting
• Proxies
• Adjournment
• Minutes
• Other issues
 INTRODUCTION
• According to Sharp v Dawes (1876), a meeting can be defined as ‘an
assembly of people for a lawful purpose’ or ‘the coming together of more
than one person for any lawful purpose’
• In general the term ‘meeting’ refers to a coming together of more than one
person
• There are certain basic requisites that have to be adhered to, in order to
ensure the validity of a meeting and that the decision(s) taken at the
meeting is not subsequently nullified(annulled)
• A meeting should be properly convened to ensure the validity of the
meeting held and resolutions passed is not to be void
• In accordance to the CA 2016, a meeting may be convened by the
followings:
i. Through board of directors- Section 310(a)
ii. By any member – Section 310(b)
iii. By the directors when requested by members-Section 311
iv. By the court-Section 314
• With the reference to Section 311, the directors may call for a meeting of
members once the company has received the following requisitions:
– Members representing at least 10% of the paid-up capital of the
company carrying the right of voting at meetings of members of the
company
– In the case of a company not having a share capital, members who
represent at least 5% of the total voting rights of all members having
a right of voting at meeting of members
• It is the duty of the directors to take action when a request is made by
members who fulfill the shareholding or membership requirements that
are:
– To convene a meeting within 14 days from the date of requisitions
– To hold the meeting on a date not later than 28 days after the date of
the notice to convene the meeting
• As provided also by the Act, member may convene a
meeting at the company’s expense
• If they had made a request to the directors to convene a
meeting under Section 311 and the director have failed to
do so
• However, to do so, the resolution to be moved at a
meeting should not be a resolution that:
✓If passed, would be ineffective whether by a reason of
inconsistency with any written law or the constitution
✓Is defamatory of any person
✓If frivolous or vexatious (troublesome)
✓If passed, would not be in the best interest of the
company
 TYPES OF COMPANY
MEETINGS
• Within a company, there are 5 kinds of meetings that fall under 2 major
categories
– Members or shareholders meetings
– Other meetings
COMPANY MEETINGS

MEMBERS /
SHAREHOLDERS MEETINGS OTHER MEETINGS

STATUTORY ANNUAL GENERAL CLASS EXTRAORDINARY GENERAL BOARD OF

MEETINGS MEETINGS (AGM) MEETINGS MEETINGS (EGM) DIRECTORS
MEETINGS
1. Statutory Meetings
• Public company limited by shares required to hold statutory meeting
• Held once in the lifetime of the company
• Should be held within a period of not less than 1 month and not more
than 3 months from the date in which it is entitled to commence business
• For example, business commence in 1st January
• So the statutory meetings can be held from 31sth Jan onwards and not
more than 30th March
• The purpose of the meeting is to enable members to know all important
matters pertaining to the formation of the company
Matter discuss shall include:
– Which shares have been taken up
– What money has been received
– What contracts have been into
– What sums have been spent on preliminary expenses
To convene meetings:
– A notice of at least 21 days prior to the meeting should be given to
members
– The board of directors is required to prepare and send to every
member a report called the Statutory Report at least 7 days prior to
the day in which the meeting is to be held
2. Annual General Meeting (AGM)
• AGM type– Public company AGM & Private company AGM
i) AGM for Public Companies
• Every public company shall hold an AGM in every calendar years-Section
340(2)
• Held within 6 months of the company’s financial year end and not more
than 15 months after the last AGM
• For example, business commence in 1st January 2018
• So the 1st AGM should take place between 1 January-30 June 2018 and the
2nd AGM takes places cannot be held exceeding 30 September 2019
• However, according to Section 340(3), a company is not required to have
the AGM in the year of its incorporation or the following year, if the
company has had its 1st AGM within 18 months of its incorporation
• If a company needs to extend the periods of meeting, this could be done
through an application to the Registrar
• The registrar shall approve the application if it is considered to be
appropriate-Section 340(4)
• Failing to convene the AGM, based on the application of any member, the
court may order the general meeting to be called-Section 340(5)
• Section 316 provides that, in a case of AGM for a public company, a notice of
at least 21 days should be given to the members prior to the meeting
• As any other case, a notice of at least 14 days should be served
Purpose of the meeting:
– Consideration of annual accounts, director’s report and auditor’s report
– Election of directors in the place of those retiring
– Appointment and fixing the director’s fee
– Any resolution or other business
• Any financial statement prepared by the directors, as stated in Section 248(1), should be
audited before it is sent to every member
• For a public company, the financial statement should be sent to every member-Section
257 and be laid prior to the AGM-Section 340
ii) AGM for Private Companies
• AGM is optional compared to Companies Act 1965, where it is mandatory for all
companies to hold an AGM
• CA 2016 enables members holding at least 5% of paid up capital to request the directors
to hold a physical meeting where:
– It has been more than 12 months since the holding of a meeting which is
requisitioned by member under Section 311
– The proposed resolution is not defamatory, frivolous or vexatious or would not be in
the company best interest
The following matters are normally considered at the AGM of a private company:
• Accounts are to be circulated within 6 months of the financial year end and lodged with
the SSM within 1 month from the circulation
• Auditors may be appointed first by the board, and then to be approved by members
through an ordinary resolution (simple majority)
• The retirement and election of directors can be decided by the members by way of
written
3. Class Meetings
• Held by holders of a particular class of shares such as
preference shareholders
• Are normally called when it is proposed to vary the rights
of that particular class of shares
• During the meeting, the members discuss the pros and
cons of the proposal and vote accordingly
• Held to pass resolution which will bind only the members
of the class concerned
• Only members of that class can attend and vote
• Calling of the meeting and the conduct will be the same as
to the general meetings of the company
• Unless stated otherwise by the article of the company
• The constitution of a company or other agreement will set
out the details of how the class meeting is to be conducted
and the consent required at that meeting
4. Extraordinary General Meeting (EGM)
• General meeting other than the statutory meeting and the AGM
• Usually called by the Board of Directors for some urgent or strategic
business which cannot wait until the next AGM to be decided
• Each business transacted at a general meeting is a special business
• Which an explanatory statement of the special business should also
accompany the notice of calling the meeting
• Other purpose of EGM:
– In some business environments when events necessitate substantial
change or a major threat, the management may want a shareholder
mandate for a particular strategic move, such as for a merger and
acquisition
– Other major issues that might threaten shareholders value may also
lead to an EGM, such as whistle blower disclosing information that might
undermines shareholders confidence in the board of directors
5. Board of Directors Meetings
• Conducted for the smooth running of the company and for the collectively
taking decision
• May be conducted to call on shares, issue debentures, borrow money, make
loans, invest the funds, etc
 NOTICE OF MEETING
• Section 321(1)-A meeting cannot be held unless a proper notice has been
given to the following:
– Each member entitled to attend the meeting at the proper time including
anyone entitled to share of the deceased member
– Each director
– The auditor
• With reference to Section 316(6), a meeting is still valid even if the company
accidently omit the notice to a person
• The followings is the normal content of a notice:
– Venue, day, time and agenda of the meeting
– General nature of the meeting
– If special resolution is proposed, the intention and text of the resolution
provided
– Detailed procedures of appointment of proxies
– If the meeting is a statutory meeting or an AGM, the notice should
describe it as such
– Any item of special business are to be transacted at the meeting,
including the explanatory statement concerning to each item of the
special business
• Section 319(1)- Notice of meeting should be written and given to the members
either in:
– Hard copy
– Electronic form
– Partly hard copy and partly in electronic form
• However, if it is provided in the constitution of the company, Section 319(2) states
that if the notice is in a hard copy form, it should be sent either personally or by
post
• If it is required by the constitution of the company for notice to be given in the
electronic form, then it should be send to the appropriate electronic address
provided or by publishing it on a website
• With reference to Section 320, a publication on a website should be notified to
members in writing and given to members either in hard copy or electronic form
stating:
– The nature of the meeting
– Venue, date and time of the meeting
– Whether the meeting is an AGM
• The notice should be available on the website thought the period beginning from
the date of notification until the conclusion of the meeting
• According to Section 316(1), a notice convening an AGM of a private
company should be given at least 14 days prior to the date of the
meeting(except a meeting to pass a special resolution)
• In the case of convening an AGM of public company, a minimum 21
days or a longer notice period is required
• Or minimum 14 days or a longer period as specific in the company
constitution- Section 316(2)
• In a situation which a special notice is required, a notice of intention
to move it should be given to the company at least 28 days prior to
the meeting
• Examples of resolutions that require a special notice are:
– Section 206(3)- The removal of directors
– Section 277- Removal of auditor
• The procedure to serve the notice should be in the same manner as
other notice practice in the company
• If it is impossible to give notice to members, the company is allowed
to send the notice of any such resolution as above for at least 14
days prior to the meeting
• By advertising (newspapers), using National or English language or
any other specific manner allowed by the constitution of a company-
Section 322
 PROCEDURES AT MEETING
• Venue anywhere in Malaysia
• More than one venue
• A meeting is a gathering of 2 or more person
• If a member appoints more than 1 representative or proxy, it shall be counted as 1 member for the
purpose of quorum
The minimum members that need to be present is as follows:
– 1 member present personally for a company with 1 member
– 2 members present personally or by proxy unless otherwise stated by the company constitution
– The quorum should be those members who are eligible to vote in respect of the agenda of the
meeting
• A quorum should be present at the start of the AGM(as determined by the constitution of a
company-Section 328
• However, it is not necessary to maintain the quorum throughout the AGM with the following
conditions:
– Proxies constitute part of the quorum
– The chairman should be satisfied that a quorum is present.
– Usually done by obtaining the confirmation of the company secretary
– If the quorum is not present within 30 minutes from the appointed time
• Meeting will either dissolve or adjourned to the same day of the following week
• Or any other as may be determined by the directors
 CHAIRMAN
• Any member from the board of director/shareholders elected by the members
present at a meeting may be chairman Unless Article provide otherwise
• Chairperson will outline the purpose of the meeting
• Ensuring meeting is properly conducted
• When discussion is happening, it is the chairperson's responsibility to ensure that
it continues to flow smoothly
• By involving all members present and by not permitting one or two people to
dominate the meeting
The principal duties of a chairman include the following:
1) Ensure the meeting is properly constituted and a quorum is present
2) Be informed of the business and objectives of the meeting
3) Preserve order
4) Confine discussions within the scope of the meeting and within reasonable limits
of time;
5) Decide whether proposed motions and any amendments to the resolutions are in
order;
6) Decide on points of order and other incidental matters during the AGM, including
ensuring compliance with the Articles
7) Guide the AGM proceedings by:
i) putting relevant questions to the meeting and taking a vote
ii) declaring the result
iii) adjourning the meeting where prevailing circumstances justify that course

The chairman when discharging his duties at the AGM, may exercise certain
powers, including the power to:
1) Refuse to put a resolution to vote if the resolution is not within the
competence of the shareholders’ meeting such as a resolution to the effect
that the directors had acted in breach of statutory duties
– However, a chairman must put a proposed resolution to a vote if it is within
the competence of the shareholders’ meeting for example, the re-election
of directors
2) Cast the decisive vote in the event of an equality of vote, if such power is
provided for in the Articles
3) Determine the order of the debate of a resolution and the duration of such
debate
- After the chairman is satisfied that the debate on a matter has been
sufficiently carried out, the chairman has the power to close the debate on the
matter
 PROXIES
Appointment of proxy
• A member is allowed to appoint any person as their proxy, unless stated
otherwise in the constitution of the company
• Section 336 proves that a proxy can be appointed as chairperson at a meeting of
members, unless prohibited by the company constitution
• Members of a meeting are eligible to appoint a proxy in their absence-Section
334
• Proxy could be any member, a lawyer, approved company auditor, person who is
approved by Registrar of Companies
• Proxy appointed is able to exercise the same rights as the appointer(member) or
any rights to attend, participate, speak and vote at the meeting
• A member who is eligible to vote, may appoint a proxy in writing
• To indicate that the proxy to attend and vote on their behalf
• However, the proxy can only vote and cannot participate in the discussion
• The company should receive the notice of the proxy appointment at least:
– 48 hours prior to the meeting for voting purpose
– 24 hours prior to the meeting for polling purpose
Removal of proxy
• The removal or termination of proxy can be done according
to Section 338 of the Act
• Which the notice of termination should be received by the
company before the commencement of the meeting
• However, Section 338(1) provides that if a notice is received
after the commencement of a meeting, the notice of removal
or termination of the proxy will not be deem to disrupt:
– The quorum of the meeting
– Any endorsement made by the proxy as the chairperson
of the meeting
– Any endorsement made by the proxy on voting procedure
– The validity of vote made by the proxy
• The constitution of the company may provide that the notice
of termination should be received by the company much
earlier from the commencement of the meeting
 VOTING
General rules
• Section 293(1)(a)(i)to(iii) state that for a company with share capital, each fully paid share
represent 1 vote in voting for written motion
• Or voting by poll
• If voting is done by raising of hand, then each individual member represents just 1 vote (1
member=1 vote)
• However, voting by raising hand should be preceded by a declaration made by a
chairperson- Section 330
• It also provides resolution at a general meeting maybe decided by show of hands, unless a
poll is demanded
• The person who can demand a poll is:
– The chairman
– At least 3 members present in person or by proxy
– Any member present personally or by proxy representing not less than 10% of the
total voting right
– Any member holding shares not less than 10% of the total sum paid-up on all shares
• In the case of a company with no share capital, each individual member will represent 1
vote
• Section 293(2) provides that only members with fully paid shares have the right to vote
Voting by proxy
• Section 294(1): A proxy is only allowed to vote by
raising of hand if he/she is the only proxy
representing member
• Section 294(2): If more than 1 proxy appointed to
represent a member in voting other than raise of
hand(by poll, etc), the appointer should clearly
state how much of the percentage of his/her
shareholding is represented by each proxy
• Section 249(3): For a public listed company, the
appointments of proxies representing a member
should follow the requirements of SEC(Bursa
Malaysia)
 ADJOURMENT
• To adjourn to another time or place means to suspend
proceedings until a later stated time or place
• Means the end of the meeting
• No shareholder action can be taken after the meeting has ended
• If within half an hour from the time appointed for the meeting a
quorum is not present, the meeting adjourned
• To the same day in the next week at the same time and place, or
to such other day and at such other time and place
• When a meeting is adjourned for thirty days or more, notice of
the adjourned meeting shall be given as in the case of an original
meeting
 MINUTES
• Every company should keep minutes of meeting-Section 343
• It is a prima facie evidence(accepted as correct until proved otherwise) that
a meeting is duly held and all proceedings have duly taken place
• Section 341-This shall comprise that the following records:
– Members resolution passed other than at the meeting of members
– Minutes of proceeding and
– Details provided to the company in accordance with Section 344-
decision by sole member (applicable to a private company)
• Additionally, such records should be kept at least 7 years from the date of
resolution, meeting or decision
• Section 342-The record should be available for inspection by any member
without charge:
– At the company’s registered office
– At another place or change of place a
– Notice has been given to the Registrar within 14 days from the records
are kept at such place or change of place
 OTHER ISSUES
• Heading on an agenda for a meeting, to show that any topics not listed
separately can be discussed at this point, usually the end
• Things that are discussed at the end of an official meeting that are not on
the agenda
• While this can be an opportunity for attendees to flag up something for
inclusion in a future agenda
• Also create disruption
• Attendees can use other issue item to hijack a meeting for their own
purposes
• From action-focused discussion to a complaint
• As it traditionally comes last, it is also the item that attendees are most likely
to remember, especially if it was negative in tone
 EXERCISES
Yumi Bhd. was incorporated in December 2015. The 1st AGM of the
company was held in March 2017. Karim and his uncle Ali are members of
Yumi Bhd. Karim attended the meeting but Ali did not as he did not receive
the notice of meeting. The company claimed that no notice was sent to Ali
due to an accidental omission. In the meeting, 2 separate resolutions were
passed that are to alter the company’s article of association, as well as to
increase the company’s share capital. Both resolution were passed by a
60% majority
Advise Karim and Ali on the followings:
a) Whether the company had breach the CA 2016 in failing to hold an
AGM in 2016
b) Whether the resolutions to alter the company’s article of association
and to increase its share capital were passed by majority required
under the CA 2016
c) Whether Ali can challenge the validity of the meeting on the ground
that he did not receive the notice of meeting
d) The importance of notice of meeting
e) Elaborate to them as well on the THREE(3) differences between the
AGM, EGM and Statutory Meeting
At the 3rd AGM of Dodo Berhad, a shareholder
took almost half an hour to comment on the
company’s failure to provide for refreshment and
parking reimbursement. He kept going on about
how loyal an investor he had been. Yet, the
chairman did not interrupt him.
Based on the scenario given:
a) Discuss the principal duties of a chairman
b) Evaluate of the chairman can exercise certain
powers in the organization