General Meetings convened by directors at request of members

Overview

Proprietary companies can pass members resolutions by circulating resolution (See s249A and s249B). A public company cannot circularise members’ resolutions and therefore a general meeting will need to be held.

The alternatives are:

S249D - requires members holding 5% of the votes or 100 members to request the directors; meeting should be held within 2 months (cannot be less if resolution to remove directors due to the effect of s203D unless the directors were given advance notice); notice should be issued within 21 days of the request or members can take over the process and then the meeting can be held up to 3 months after the request. What if directors fail to convene meeting: s249E

S249 F - members holding 5% of the votes can call the meeting but it is conducted at their cost.

S249G – seeking a court order is possible if ss 249D or 249F cannot be utilised.

S249N & 249O –members holding 5% of the votes or 100 members can move a resolution to be included in the business of the next general meeting (2 months notice is required).

Preliminary issues

• Directors’ role (s 198A) – directors manage the business of the company

• Directors must convene a general meeting when requested by members who have at least 5% of vote or 100 members (s 249D)

• Purpose of General Meeting? Must be held for a proper purpose (s 249Q)

• S 249C – a director can convene General Meeting (replaceable rule for proprietary companies)
• s 249CA- a director can convene General Meeting (mandatory rule for public companies)

Convening the meeting

• S 249H – at least 21 days clear notice required (but 28 days for listed company:s 249HA). Section 249H(2)(b) CA allows for short notice of meetings if members holding at least 95 per cent of the votes agree to short notice. 

• S 249J – notice deemed given 3 days after posting

• S 249L – notice to give details of items

• S 136 –  requirements for amendment of constitution (also note s140 requirement)

• Advise ASIC within 14 days (Form 205) [see ss 136(5) & 138]

NOTE: Court has power to invalidate a meeting or resolution because of irregularities (s1322)

Special requirements for meeting convened to remove a director