AN OVERVIEW ON THE MANAGEMENT OF MEETINGS CS FLORENCE K. SHAKO

Session Content Introduction Purpose and Importance of meetings Types of meetings General Aspects of meetings Legal provisions on meetings

INTRODUCTION The Companies Act has not defined the term meeting. However, it means the coming together of two or more persons. Sharp vs. Dawes (1876), a meeting was defined as “an assembly of people for a lawful purpose or the coming together of at least two persons for any lawful purpose.” The common purpose is usually verbal interaction, such as sharing information or reaching agreement for a common purpose. Physical assembly? One director companies?

PURPOSE & IMPORTANCE OF MEETINGS Company meetings are held from time to time in order: To comply with statutory provisions To transact business that may only be transacted at a general meeting of the members or shareholders To enable the directors and members to exchange views regarding the running of the company’s affairs or resolve some existing disputes. To transact some business of a class of the company’s members

TYPES OF MEETINGS Annual General Meeting (AGM) Held annually Section 310: Every public company shall hold a general meeting as its annual general meeting within six months from the end of its year. Slightly relaxed for newly established corporations which are allowed up to 18 months from incorporation. 21 day notice, which must state it is a notice of an AGM, to all entitled to attend; this might be reduced

Annual General Meeting Usually held in the city/town where company is registered and within business premises. Ordinary business of an AGM includes: Consideration of Annual Accounts, Director’s report and Auditors reports on the accounts Declaration of dividends Appointment of directors in place of those retiring Appointment and fixing of remuneration of auditors. For any other special business there must be an explanatory statement of the special business.

Statutory meeting Applicable to public companies limited by shares Happens once in the company’s lifetime. Must be held within 1-6 months of the company’s commencement of business. Generally to familiarize members with important information on the company e.g. shares taken up, money received, contracts entered into etc. Members must be presented with a statutory report.

General Meetings These are any other meetings other than an AGM or statutory meeting or an adjournment thereof. Who may convene a general meeting at other times? Directors: Section 276 provides that the directors of a company may convene a general meeting of the company. This is usually to discuss urgent matters that cannot wait until the next AGM

General Meetings Directors pursuant to the requisition of members: Section 277(1) provides that the members of a company may require the directors to convene a general meeting of the company. Requests to do so from- members representing at least 10% of the paid-up capital of the company as carries the right of voting at general or of total voting rights of all the members having a right to vote at general meetings. In the case of a private company, the required percentage is five percent

General Meetings Members: If after having been required to convene a general meeting under section 277, the directors fail to do so, the members who requested the meeting or any of them representing more than one half of the total voting rights of all & them may convene a general meeting.

General Meetings Court order: The Court may, either on its own initiative, or on the application of a director or a member of the company who would be entitled to vote at the meeting, make an order requiring a meeting to be convened, held and conducted in any manner the Court considers appropriate. Re El Sombrero Ltd (1958)

Class meetings Section 321 provides that the provisions of the Act apply with necessary records of resolutions and modifications, in relation to resolutions and meetings of: holders of a class of shares; and in the case of a company without a share capital, a class of members

Board and Management Meetings The general meeting is the principal agency for the members, by resolution, to reach a decision; At the general meeting, the members appoint directors, to whom are generally delegated all powers of management; Directors usually make their decisions at board meetings.

Board and Management Meetings The board should think and act as one body and not as a collection of individuals. The board or management committee must meet regularly, retain full and effective control over the company and monitor the executive management. The executive management may also regularly hold meetings for purposes of execution and implementation of board resolutions.

GENERAL ASPECTS OF MEETINGS Quorum Minimum number of members to constitute a valid meeting. Required only at the beginning of the meeting. The number is generally specified by the articles. Decisions taken without quorum are invalid and non-binding. Where the articles prescribe a quorum of at least two members, and there is no quorum, there would also be no valid meeting

Quorum: One person? Section 292(1): A company limited by shares or guarantee and having only one member, one qualifying person present at a meeting constitutes a quorum S. 280 (4): Court can direct that one member of the company present in person or by proxy shall be deemed to constitute a meeting If the meeting is a class meeting and all the shares are held by one member If the meeting is an adjourned meeting and the articles provide that “the member or members present shall be a quorum

Proxies S. 298: A person appointed by a member to attend and vote on his behalf Must be in writing, signed by the member Has to be deposited with the company or requisite person Can be a member or non-member Entitled to vote on a poll and not a show of hands Appointment may be terminated by notice

Adjournment Suspending proceedings of the meeting to be continued at a later fixed time. If adjourned without stipulation as to when to meet (adjournment sine die), then fresh notice must be issued. Chairman may adjourn with the agreement of the members. May also be moved by a majority of the members. Only unfinished business discussed at the original meeting may be transacted.

Resolutions Decisions taken at meetings. Ordinary resolutions – requiring simple majority Special resolutions – requiring two thirds majority e.g. to alter domicile, name, articles of a company etc. Written resolutions - resolution of the members, or of a class of members of a private company may be passed either as a written resolution; or at a meeting of the members.

LEGAL PROVISIONS ON MEETINGS Kenya finally embarked on long overdue transition to modern company and insolvency law with Companies Act 2015 and Insolvency Act, 2015. Act draws heavily on the Companies Act, 2006 with a 9 month implementation period. Include subsidiary legislation and setting up or reforming of institutions necessary for its implementation.

Legal provisions Shareholders’ written resolution in private companies – no requirement for unanimity. All that is required is a simple majority similar to that of a shareholding meeting for normal meetings or 75% for special resolutions. Abolition of AGMs for private companies although they can elect to hold them in their articles. Short notice of meetings in private companies where consent by holders of 90% by nominal value of shares carrying the right to vote.

Legal provisions Notice of AGM may be given in hard copy or electronic form including a website. No provision for issuance of notice by newspapers as was previously the case. A public company shall hold an AGM within 6 months from the end of its financial year. Shareholder communication – Act makes provision for electronic communication to shareholders.

Questions?