CONDUCT OF A MEETING

CONDUCT OF MEETING

1. QUORUM

Unless the AOA provide otherwise, a quorum is two members personally present – Section 147(1)

Therefore in the absence of authorization in the AOA, a meeting cannot be constituted by one member and any resolution purpoted to be passed at such a ‘meeting’ are invalid.

Case: UNITED INVESTMENT & FINANCE LTD v TEE CHIN YONG & ORS [1967]1 MLJ 31

The issue in this case whether one person present can constitute a valid meeting. The plaintiff claimed payment of balances due from the defendants to the company for shares in the company upon forfeiture of their shares. The resolution to forfeit the shares and institute proceedings was taken at AGM of the company attended only by two members of whom one had paid up his shares. The meeting was and adjourned meeting and article 35 provided that at an adjourned meeting “the members present should be a quorum”.

On the question of the validity of the resolution, the court held that as the meeting of the company could not be constituted by one member there was no quorum and therefore the resolution purpoted to have been passed thereat was invlid.

Case: SUM HONG KUM v LI PIN FURNITURE INDUSTRIES PTE LTD [1996] 1 SLR(R) 529 

            The AOA of a company provided that no business could be transacted unless a quorum was present. The plaintiff was removed as a director at a meeting convened without the requisite quorum. The Singapore High Court granted a declaration that the meeting was invalid. The court held that the procedural irregularity in the meeting caused substantial injustice to the plaintiff and could not be validated.

Where a person is present at the commencement of meeting, but leaves before the business is transacted, leaving the meeting with less than the required quorum, it is a matter of construction of the AOA as to whether the meeting is valid /invalid.

In TAN GUAN ENG v BH LOW HOLDINGS SDN BHD & ORS, [1992] 1 MLJ 105, the High Court construed the relevant AOA to mean that a quorum was required only at the time when the meeting proceeded to business. Given that there was a quorum present when the meeting proceeded business, ie the continued meeting with the presence of only the holder of a valid proxy was a valid meeting. Therefore the resolution passed was a valid resolution

For the purpose of determining whether a quorum is present, a person attending as a proxy or as a representative of a member corporation is usually deemed to be a member:  Table A article 47. However, if the AOA authorizes one person meeting, a quorum of two is required.  A meeting where one person present but holds a proxy from another member of the company is invalid - RE SALVAGE ENGINEERS LIMITED [1962] MLJ 438

A corporation that is a member of a company may, by resolution of its directors, authorizes a person to act as its representative at meetings of the company. That person is entitled to exercise the same powers as the member corporation would have been entitled to exercise:  Section 147(3)

The AOA usually require a quorum to be present at the commencement of the meeting in order to transact business:  Table A article 47. If a quorum is not present within half an hour after the appointed time of a requisitioned meeting, the meeting is dissolved.

In the case of other meeting, the meeting is adjourned to the following week at the same time and place.

The court may order that a meeting be convened and it may direct that one member present be deemed to constitute a quorum: Section 150

2. CHAIRMAN

Any member present at the meeting may be elected to chair the meeting, Section 147(1).

Normally the chairman of the Board of Directors shall also act as chairman at every general meetings.The chairman’s duty is to direct the meeting and to preserve order and  ensure that the proceeding are conducted in a proper manner

3. VOTING

The power to vote is not a fiduciary power and a shareholder owes no duty to anybody as to how he or she will exercise their vote:  TUAN HAJI ISHAK BIN ISMAIL & ORS v LEONG HUP HOLDING BHD

Unless the AOA provide otherwise, voting is by show of hands, in the first instance.Table A art 54 states that, by providing a show of hands, each member or representative of a member has one vote. Proxy votes are usually not counted on a show of hands.

In BIN HEE HENG v MANAGEMENT CORP STRATA TITLE NO 647, it was held that the term ‘show of hands’ included a ‘voice vote’

In cases involving disputed questions, members can demand a poll:  Table A article 51.

On a poll, every member present in person or by proxy or attorney usually has one vote for each share held:  Table A, article 54.  Because of this, only a poll can give an accurate indication of the will of the meeting. Members have the right to demand a poll at a general meeting on any question or matter other than the election of the chairman of the meeting or the adjournment of the meeting. Any provision in the AOA excluding this rights is void:  Section 146(1)

In some cases, the chairman and certain categories of members may demand a poll where a resolution has been defeated on a show of hands: Table A, article 51.

Section 149(1)(a): A Proxy is entitled to vote only on a poll, unless the AOA provides otherwise.

Members are generally entitled to exercise their voting rights in their own interest. This is subject to qualification that they do not commit a ‘fraud on the minority’.

4. PROXIES

A proxy is a person authorized to vote on behalf of the appointing member. It also describes the instrument of appointment. Members who are entitled to attend and vote at meeting of the company are entitled to appoint a proxy to attend and vote in their stead.

Section 149(1) - The proxy need not be a member.

Section 149(2) - Notice convening meetings of companies must state prominently that members are entitled to appoint one or two proxies who need not be members.

Section 149(1)(a): A proxy has the same right to speak at a meeting as the appointing member, but can only vote on poll, unless the AOA allows the proxy to vote on a show of hands. AOA cannot exclude the statutory right to appoint a proxy.

Table A, article 59 requires the instrument appointing the proxy to be deposited with the company not less than 48 hours before the meeting at which the proxy purposes to vote, or not less than 24 hours before the taking of a poll. A member who appoints a proxy may still elect to attend a meeting and vote in a person. The proxy then does not have vote at that meeting but may still vote at later meetings when the appointing member does not attend.

Case:  ANSETT v BUTLER AIR TRANSPORT LTD [1958] 75 WN (NSW) 306 

Proxies were given for meeting on 31 Dec 1957, which was then adjourned on 21 Jan 1958. Many shareholders who had given proxy for December attended meeting personally, issue raised was whether the proxies of the shareholder present at the meeting had been revoked or valid for poll. Court held that it is clear that notwithstanding their personal attendance, their wishes are their proxy should vote for the poll.

5. MOTIONS

A motion is a proposal which is being put forward at a meeting for discussion before it is formally accepted, passed or adopted.

A motion is moved by a ‘mover’ or ‘proposer’ and unless it is a formal motion, it does not require a ‘seconder’ unless the AOA so provide. However, it is common for the Chairman to ask for a seconder to gauge whether or not there is support for the motion.  If there is no seconder, it may imply that there is no support for the motion and the Chairman usually proceeds to the next business.

The manner in which a motion may be adopted or rejected is by way of a vote by those present at the meeting and entitled to vote. The commonly used methods are:

1. by voice
2. by show of hand
3. by poll
4. by ballot

      Under Section 145(1), minutes of all proceedings of the general meetings and of meetings of directors and of managers (if any) must be entered or recorded in books kept for that purpose within 14 days after the meeting was held.

      The minutes is to be signed by the Chairman of the meeting at which the proceedings were had or by the Chairman of the next succeeding meeting.

6. RESOLUTION

A resolution is a motion or proposal that has been accepted or passed by the necessary majority at a meeting duly convened and held.

      For a resolution to be validly passed or adopted we have to consider several other aspects such as:

• the contents and duration of any notice required to be given.
• the majority required for adopting the motion as a resolution.
• the persons affected by the resolution.
• the proper person having been in the chair.
• the presence of a quorum.

Ordinary resolutions are passed by a simple majority of those present and voting. Special resolutions are resolutions passed at meetings requiring written notice of at least 21 days and the approval of a majority of ¾ of such members of the company present at the meeting and voting in person or by proxy.

7. MINUTES

Minutes are records of proceedings and resolutions passed at the meetings. The minutes that have been signed and entered in the record are conclusive evidence that a meeting has been duly held and convened that all appointments of officers shall be deemed to be valid and that all proceedings were duly conducted.

The minutes book shall be kept at the registered office and any member could inspect them without charge.