1. Shareholders and company meetings

2. A shareholder meeting is a meeting of those holders of that company’s shares who are entitled to exercise voting rights in relation to that matter
Shareholders meetings are held to provide shareholders with an opportunity to debate and vote on matters affecting the company
Although the board of directors, together with executive management, is responsible for the active running of the company, the ultimate control of the affairs of the company, at least in theory, rests in the hands of the shareholders acting in general meeting

3. At common law, shareholders in general meeting are entitled to exercise all the powers which are not expressly or impliedly conferred on the directors by the Companies Act or the company’s constitution
The powers of shareholders have been restrictively interpreted by the courts, and matters that are assigned to the board of directors usually exclude the authority of the general meeting of shareholders
Although shareholders can vote to elect and remove directors, they have no right to chose the CEO, …

4. They cannot insist on the payment of a dividend; they cannot vote to change the company’s line of business, they are powerless to prevent directors from squandering money on employee benefits, political or charitable contributions or executive perks
The authority of and balance of power between the board and shareholders in general meeting are determined by the Companies Act, the constitution of the company, or in the absence of direction in any of the former, by common law

5. It is customary for the constitution of the almost all companies to charge the directors with the day-day oversight of the business of the company and for that purpose, to confer authority on the directors to exercise all powers not required to be exercised by the general body of shareholders
As a general rule, authority conferred on either the shareholders or the board in terms of the company’s constitution or the Act is conferred exclusively, and shareholders cannot exercise powers collaterally with the board or vice versa

6. John Shaw and Sons (Salford) Ltd v Shaw [1935] 2 KB 113
“A company is an entity distinct alike from its shareholders and its directors. Some of its powers may, according to its articles, be exercised by directors, certain other powers may be reserved for the shareholders in general meeting. If powers of management are vested in the directors, they and they alone can exercise these powers. they disapprove

7. The articles of association of most companies allow meetings of the board of directors to be informal, and to be conducted for the most part as the directors see fit. By contrast, the procedures for general meetings are much more formalised, with requirements imposed by the Act , the company’s articles and the common law.
Decisions at a general meeting are taken by the members voting on resolutions.
The question of what classes of members are entitled to vote and how many votes each share carries are laid down in the company’s articles; the Act is silent on these questions.

8. Nature of the shareholders’ vote
Unlike the directors of a company who stand in a fiduciary relationship to the company and are therefore constrained to act in its best interests
Shareholders are not generally bound to exercise their vote in the best interests of the company as a whole, and a shareholder may vote solely in his/her self interest
The shareholder’s right to vote is a proprietary interests.

9. The right to vote is attached as an incident of property to be enjoyed and exercised for the owner’s personal advantage
Shareholders, therefore, unlike directors are not bound to exercise their discretion on behalf of the company ‘free of fetter or restraint’ and they can regulate their voting rights by agreement and agree to vote their shares en bloc (voting pool)
Shareholders are not subject to any fiduciary duties, either to his fellow-members or to the company.

10. A shareholder is therefore under no duty to avoid conflicts of interest (and can therefore vote for himself when the general meeting elects the board of directors) and he is entitled to exercise his vote to advance his own selfish ends.
In addition to the powers conferred by the Act, and the constitution of the company, a general meeting of shareholders may also exercise certain residual governance powers (referred to as ‘default powers’ ) and act instead of the board where the board is unable to act for the company either because a quorum cannot be obtained; or the board has exceeded its powers and its actions are voidable by the shareholders acting in general meeting

11. The only way in which the general body of the shareholders can control the exercise of the powers vested by the articles in the directors is by altering their articles, or, if opportunity arises under the articles, by refusing to re-elect the directors of whose actions . They cannot themselves usurp the powers which by the articles are vested in the directors any more than the directors can usurp the powers vested by the articles in the general body of shareholders”

12. Despite the fact that companies usually adopt articles giving the board of directors relatively unfettered control of the company in normal circumstances, the decision making powers and role of the general meeting are not without significance in a number of ways

13. Removal of directors
If the shareholders fundamentally disagree with the policies pursued by the directors or are unhappy with their performance then, ultimately, a majority of the shareholders can remove the directors from office.
Section 175 (1) provides that a company may by resolution of which special notice has been given , remove a director before the expiration of his/her period in office notwithstanding anything in tis articles or in any agreement between it and him

14. Section 175 (1) appears to render, de facto, void anything contained in a company’s articles or in a contract between the company and a director which would prevent that director being removed if a majority of members so wished.

15. Ratification and approval of irregularities
It has always been recognised that the general meeting has wide powers to ratify or approve acts which are within the powers of the company but which have been carried out in an irregular way and, further, to ratify certain breaches of directors’ duties.
If, for example, the directors act purportedly on behalf of the company in a matter which is outside their authority under the articles, this can be subsequently ratified by the general meeting

16. Ordinary and special resolutions
Every resolution of shareholders is either an ordinary or a special resolution
An ordinary resolution of shareholders is negatively defined in section 133 of the Act and it is simply a resolution which is passed by a simple majority at a duly convened meeting (50+% of the voting rights present, in person or by proxy and eligible to vote)
A special resolution is defined in section 133(1) as follows;

17. “ a resolution shall be a special resolution when it has been passed by a majority of not less than ¾ of such members entitled to vote as are present in person or by proxy at a general meeting of which not less than 21 days notice has been given, specifying the intention to propose the resolution as a special resolution and the terms of the resolution and at which members holding in the aggregate not less than ¼ of the total votes of the company are present in person or by proxy”
The notice must state that the resolution is to be moved as a special resolution
The notice must set out the terms and effect of the resolution and must state the reasons for the proposed special resolution

18. The quorum at the meeting must be not less than ¼ of the total votes, represented in person or by proxy, of all the members of the company entitled to attend and vote at the meeting

19. Convening a general meeting
To be validly held a meeting must be called in accordance with the Act and the company’s articles see section 128 of the Act
All members entitled to attend must give notice.
The articles of a company will contain provisions dealing with the nature of the notice given of meetings [see section 50 of table A]
Notice of the business to be transacted must state the resolution to be passed in such a way as fairly to state the purposes for which the meeting is convened

20. There must be complete identity between the substance of the resolution as passed and the substance of the resolution as set out in the notice
Section 127 (1):- a company’s annual general meeting may be called by 21 days notice in writing, and a meeting of the company, other than an annual general meeting or a meeting to pass a special resolution, may be called by a 14 day notice in writing or in the case of a private company, 7 days notice and any provision of the articles shall be void so far as it provides for the calling of a meeting of the company, other than an adjourned meeting by a shorter notice

21. Types of meetings
ANNUAL GENERAL MEETING:- in terms of section 125 (1) every company shall hold general meetings to be known and described in the notice calling such meeting as annual general meeting
In terms of section 125 (2) AGMs must be held within a period of 18 months after the date of incorporation of a company and thereafter, within not more than six months after the end of or every ensuing financial year of that company and within not more than 25 months after the date of the last preceding such meeting of that company

22. The directors must call the annual general meeting
The directors must call the annual general meeting. The object of this requirement is to ensure that those members who wish to do so can meet together and confront the directors at least once a year
In terms of section 125 (3) the AGM shall deal with and dispose of all matters required in terms of the Companies Act to be dealt with and disposed of at an AGM and deal with and dispose of any other matters prescribed by the articles of association and any matter capable of being dealt with by any general meeting of the company
The usual business at an AGM can include; the declaration of dividend, the consideration of the accounts, balance sheets and the reports of the directors and auditors, the election of directors in place of those retiring, and the appointment of, and the fixing of remuneration of, the auditors

23. Extraordinary general meetings
Any general meeting of a company, other than an AGM, is an extraordinary general meeting
In terms of section 126, despite anything in the articles, the directors are bound to convene an extraordinary general meeting on the valid requisition of the holders of not less than 1/20 of such paid-up capital of the company carrying the right of voting at general meetings
If the directors do not within 21 days of the deposit of the requisition at the registered office of the company, proceed to convene the meeting fixed for a date within 28 days of its being summoned, the requisitionists, may convene it themselves so long as it is held within 3 months after such deposit

24. The section imposes 3 requirements for a valid requisition ;
1. A deposit
2. A statement of the objectives
3. The signature of the requisitionists

25. Meeting convened by the courts
If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting of the company in the manner prescribed by the articles or the Act, or if for any other reason the court sees fit, the court may, either of its own motion or the application of any director of the company who would be entitled to vote at the meeting, order a meeting of the company to be called, held and conducted in such manner as the court thinks fit- see section 128

26. The question for the court is whether it is impracticable to call a meeting not whether it is impossible – see Re El Sombrero Ltd [1958] Ch 900
in recent times the courts have used this power to prevent a minority shareholder using the quorum provisions as a weapon in a dispute, i.e. by refusing to attend meetings so that no quorum under the articles or shareholder agreement can be obtained- see Re Opera Photographic Ltd [1989] W.L.R 684

27. Section 128 is designed to enable companies top conduct their business
Section 128 is designed to enable companies top conduct their business. The jurisdiction of the court under the section is very wide and will apply whenever ‘as practical matter the desired meeting of the company cannot be conducted’
However, the general policy of the courts has been not to interfere with the internal domestic affairs of the company where the company ought to be able to regulate its own affairs by appropriate resolutions of a majority of shareholders

28. Convening a general meeting
To be validly called a meeting must be called in accordance with the Act and the constitution of the company. thus all members entitled to attend must be given notice
Unless determined otherwise, the power to convene a meeting must normally be exercised by way of resolution at a properly constituted board meeting
The courts have held this power as a fiduciary power of a discretionary nature which must be exercised in good faith in the interest of the of the company as a whole. See Pergamon Press Ltd v Maxwell [1970] 2 All ER 809

29. A single director or the company secretary may not validly call a general meeting unless such action is properly authorised or subsequently ratified by the board, although there is rebuttable presumption that, in the absence of contrary evidence, that any meeting that is called has been properly called on proper authority
In terms of section 127 a company’s AGM may be called by 21 days notice in writing, and a meeting of the company, other than an AGM or a meeting to pass a special resolution, may be called by 14 days notice in writing or, in the case of a private company, by seven days notice in writing and any provision of the articles shall be void so far as it provides for the calling of a meeting other than an adjourned meeting on a shorter notice that specified in section 127 (1)

30. In terms of section 127 (2) a meeting maybe called by shorter notice than that specified above or in the articles if that is agreed to by (1) all the members entitled to vote in the case of an AGM ; or (2) a majority of members holding not less that 95% of the shares giving the right to attend and vote
Section 128 (1) (a) provides that unless the articles of the articles of a company provide to the contrary, notice of the meeting of a company is to be served on every member of the company as required by Table A
If not of a meeting is not given to every person entitled to notice, any resolution passed at the meeting will be of no effect

31. Section 131 provides that;
‘ a notice may be given by the company to any member either personally or sending by post to him or to his registered address or, if he has no registered address within Zimbabwe, to the address, if any, within Zimbabwe supplied by him to the company for the giving of notice to him. Where a notice is sent by post, service of the notice shall be deemed to effected by properly addressing, prepaying and posting a letter containing the notice and to have effected in the case of a notice of a meeting at the expiration of 48 hours after the letter containing the same is posted, and in any other case at the time at which the letter would be delivered in the ordinary course of course of post

32. Contents of notice
The articles of a company will contain provisions dealing with the nature of the notice to be given of meetings
Section 50 of Table A provides that the notice to call a meeting must include the following;
The date, time and place for the meeting,

33. the general nature of that business to be transacted
the general nature of that business to be transacted. Notice of the business to be transacted must ‘state the resolution to be passed in such a way as fairly to state the purpose for which the meeting is convened, so that every shareholder may make up his mind whether he will or will not attend with knowledge of the result of his act’

34. Conduct of General Meeting
In terms of section 53 of Table A no business shall be transacted at any general meeting unless a quorum of the members is present at the time when the business proceeds to business; save as herein otherwise provided, two members present in person shall be a quorum
Section 128 (1) (b) similarly provides that two members personally present at a meeting shall form a quorum

35. The quorum must be an effective quorum i. e
The quorum must be an effective quorum i.e. it must consist of members qualified to take part in and decide upon questions before the meeting
The word meeting prima facie means the coming together of more than one person, one person cannot constitute a meeting even where he attends in more than one capacity or holds proxies for other persons- see Sharp v Dawes (1886) 2 Q.B.D . 26, CA and James Prain & Sons Ltd, Petitioners, 1947 S.C 325
However, in East v Bennett Bros. Ltd [1911] 1 Ch. 163 it was held that one member who held all the shares of a class, constituted a class meeting

36. In terms of section 54 of Table A, if a quorum is ot present within half an hour of the time appointed for the meeting, the meeting shall stand adjourned to the same day in the next week at the same time and place, or at such time and place as the directors may determine, and if at the adjourned meeting a quorum is not present within half an hour, the members present shall form a quorum
Section 128 (1) (d) provides that unless the articles provide to the contrary, any member elected by the members present may chairman thereof
However, the articles usually provide who is to be chairman and section 55 of Table A provides that the chairman of the board of directors, if any, shall preside as chairman at every general meeting of the company

37. If there is no such chairman or if he shall not be present within 15 minutes or is unwilling to act, the directors present shall elect one their number to be chairman of the meeting
Section 56 of Table A provides that if at any meeting no director is willing to act as chairman or if no director is present within 15 minutes after the time appointed for holding the meeting, the members present shall choose one of their number to be chairman of the meeting

38. The duties of the chairman of a general meeting are as follows;
To preserve order
To see that the proceedings are regularly conducted
To take care that the sense of the meeting is properly ascertained with regard to any questions properly before it
To decide incidental questions arising for decision during the meeting, e.g. whether proxies are valid
The chairman does not have a casting vote unless expressly given one by the articles

39. Adjournment
In terms of section 130 (1) of the Act if at any meeting of a company, any member of the company who is present and is entitled vote at that meeting demands an adjournment of the meeting upon any grounds stated by him, the chairman shall put the demand to the vote of the meeting, and if a majority of the members present personally or by proxy and entitled to vote at that meeting or if such members representing personally or by proxy more than half of the share capital of the company represented at the meeting vote in favour of adjournment, the chairman shall adjourn the meeting to …

40. ...a day seven days after the date of the meeting or, if that day is a public holiday, to the next succeeding day, other than a public holiday
When a meeting has been adjourned as aforesaid, and with respect to a public company, the secretary of the company shall, upon the date not later than four days after the adjournment, publish in a newspaper circulating in the district where the registered office of the company is situated, a notice stating –
The time and place to which the meeting was adjourned; and
The matter before the meeting at the time when it was adjourned; and

41. the grounds for adjournment
See section 130 (2)
Any person acting as chairman of a meeting of a company who fails to comply with of the requirement of section 130 (1) and any secretary of a company other than a private company who fails to comply with the requirements of section 130 (2) shall be guilty of an offence

42. Voting at a general meeting
Voting at a general meeting may take place by a show of hands or on a poll.
The common law rule is that, unless the articles provide otherwise, a resolution put to a meeting is normally decided in the first instance by a show of hands [ see Re Horbury Bridge Coal Co. (1887) 11 Ch.D. 109, CA
On a show of hands, any person present and entitled to vote has only one vote irrespective of the number of shares held by that person

43. Articles usually adhere to this common law position
Articles usually adhere to this common law position. Section 58 of Table A provides that at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is, before or on the declaration of the result of the show of hands, demanded [see the entirety of section 58 of Table A]
A shareholder may exercise or abstain from exercising his or her vote at their discretion
In terms of this procedure voters in favour of a motion are asked to raise their hand and are counted and voters against a motion are asked to the same. The chairman then announces whether the motion is carried or lost

44. Voting on a show of hands has the advantage of being a fast and simple process of taking uncontroversial decisions quickly
Although a show of hands can be taken quickly, it is not an accurate method of ascertaining the wishes of the members of a company
Further it does not pay due regard to the wishes of a member holding a large number of shares since he, she has only one vote on a show of hands
Consequently the right to demand a poll exists at common law

45. The number of votes which a member has on a poll depends on the articles
On a poll taken at a meeting of a company, a member entitled to more than one vote need not, if he votes, use all his votes or cast or cast all the he votes he uses in the same way- section 129 (6)
This provisions was introduced to meet the difficulties of large trust corporation which might hold shares in a company on behalf of two or more different trusts, whose respective interests might well require different exercises of its votes

46. Proxies
Section 129 (1) provides that any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint one or more persons, whether members or not, to act in the alternative as his proxy to attend and vote instead of him, and a proxy appointed to attend and vote instead of a member shall also have the same right as the member to speak at a meeting
Every notice calling a meeting must state this right to of a member to appoint a proxy. –section 129 (3)

47. Minutes
Section 138 provides that every company shall cause minutes of all proceedings of general meetings, be entered into books kept for that purpose
Such minutes, signed by the chairman of the meeting are evidence of the proceedings – section 138 (2)

48. Resolutions
In the absences of a contrary provision within the Companies Act and the constitution of the company, the company in general meeting acts by ordinary resolution
An ordinary resolution is not defined in the Act, however, it is simply a resolution passed by a simple majority of votes of the members entitled to vote and voting in person or where allowed, by proxy, at a meeting of which notice has been duly given

49. A special resolution is defined in section 133 as a resolution passed by at least ¾ majority of [the votes of] the members entitled to vote and voting in person, or where allowed, by proxy at a general meeting of which notice of at least 21 days specifying intention to propose the resolution as a special resolution has been given
in terms of section 136 (1) within one month after the passing of any special resolution a copy of that resolution shall be transmitted to the Registrar who shall register that resolution and that resolution shall be of no force or effect until it is so registered

50. Informal and written resolutions
In the case of Re Duomatic Ltd [1969] 2 Ch 365 the court developed a principle which has come to be known as the ‘Duomatic principle’ which holds that if all the members who have a right to attend and vote at a general meeting assent to a transaction which the meeting could carry into effect, the assent is biding as a resolution of the meeting would be
It is not necessary that should hold a meeting in one room or one place to express that assent simultaneously

51. The principle cannot apply where the assentors could not validly have passed a resolution at a formal meeting
In terms of section 134, private companies are allowed to pass any resolution without holding a meeting, provided all those who could have attended the meeting and voted sign the resolution instead
such resolution shall be deemed to have been passed on the date on which the same was signed by the last member to sign
However, section 134 shall apply to a resolution to remove an auditor or a director –section 134 (2)