Shareholder meetings, also known as general meetings, serve as a platform for shareholders to discuss internal company matters and make important decisions regarding the business. In this article, we look beyond the expectation of door gifts or complimentary food, and delve right into key aspects that shareholders should be aware of.
Notice of Meeting
A notice of meeting is a document providing details about the upcoming general meeting, including the agendas and resolutions to be deliberated in the meeting. The notice should adequately inform shareholders about the resolutions to enable them to determine their attendance. Failing to provide sufficient information in the notice may invalidate the proceedings of meeting.
Typically, the notice period varies according to the types of companies and meetings, as follows:
| Type of Company | Type of Meeting | Notice required |
| Public Company | Annual General Meeting | 21 days |
| Ordinary General Meeting | 14 days | |
| Private Company | General Meeting that involves passing of Special Resolutions | 21 days |
| Ordinary General Meeting | 14 days |
The company’s constitution can also modify these timeframes to require longer notice periods.
If a shareholder with full knowledge of the meeting and its agendas, chooses to be absent or abstain from voting, they are bound by the decisions made by the voting members. They cannot later raise complaints or objections, unless they can prove that there is non-disclosure of material facts in the notice of meeting.
Nevertheless, courts generally hesitate to invalidate annual general meetings due to technical irregularities in the notice of meeting, as long as no significant injustice is caused to the members of the company. For example, in the case of Ronald Felix Hardin v Nora Hardin & Anor [2017] MLJU 867, the plaintiff argued that he did not receive the notice of meeting and only found out about the meeting through his brother, who was also a shareholder of the same company. The court did not invalidate the meeting, as the plaintiff had prior knowledge of it and suffered no substantial injustice.
Voting
Typically, each shareholder is entitled to one vote per ordinary share they hold. However, preference shareholders in public companies do not have voting rights, even though they may enjoy other privileges of ordinary shareholders, such as attending general meetings.
During the annual general meeting, eligible shareholders vote on various company affairs, including the appointment of directors, dividend payments, and the selection of auditors.
There are two types of resolutions:
- Ordinary resolutions – A simple majority, which means more than half of the total number of votes cast is required to pass an ordinary resolution
- Special resolution – At least 75% of valid votes in favor of the resolution is required
Special resolutions are crucial for obtaining broader support on significant company decisions. They safeguard minority shareholders by ensuring important choices that impact the company’s constitution, such as amendments to the company’s constitution and changes to the share capital, receive proper consideration.
Appointment of Proxies
Shareholders can appoint proxies to attend general meetings on their behalf if they are unable to attend personally. Proxies act as representatives of absent shareholders and possess the same rights as any other shareholder at the meeting, including the ability to attend, speak, and vote. The right of a member to appoint a proxy is explicitly provided in statute, specifically Section 334(1) of the Companies Act 2016.
To appoint a proxy, shareholders must complete a proxy form, clearly identifying the proxy and providing instructions for voting, which the proxy is bound to follow.
Election and Removal of Directors
Shareholders hold the power to remove directors who demonstrate poor performance or disregard the company’s interests. In private companies, shareholders can exercise this power by passing an ordinary resolution, even before the director’s tenure of office expires. Public companies, however, must adhere to the requirements outlined in Section 206 of the Companies Act 2016 when removing a director, including issuance of a special notice for the removal and ensuring that the removal takes effect only when the director’s successor is appointed.
The “Q&A” Session & the Right to Speak
Shareholders have the statutory right to speak during meetings and question the board of directors regarding their decisions and business actions. They are entitled to expect full disclosure from the directors, enabling them to make informed decisions about the company’s affairs.
General meetings provide shareholders with valuable opportunities to express concerns, ask questions, and hold directors accountable for their decisions and policies that directly impact their interest in the company.
Shareholders possess various rights aimed at safeguarding their interests in a company through general meetings. In the event that these rights are compromised or violated, shareholders can always pursue legal recourse to exercise their rights.