General meetings composed of shareholders are normally called by directors. Any general meeting above and beyond the Annual General Meeting ('AGM') is called a General Meeting ('GM').
The directors of public companies are obliged to call an AGM once each year. The annual general meeting must be held within six months of the day after the company's accounting reference date. 21 clear days' notice is required for an AGM, although it is open to members to agree that a shorter period of notice is acceptable. Their decisions, however, must be unanimous. In certain instances, the Companies Act 2006 (CA 06) requires special notice for resolutions and, in this case, 28 clear days are required.
Private companies are not subject to the obligation to have AGMs apart from private companies which have shares which are traded on a regulated market in an EEA state.
GM is the name given to every meeting of members other than the AGM. The period of notice required for a GM depends on the type of resolution to be proposed at the meeting. If only ordinary (those passed by a simple majority) are on the agenda and if the appointment of directors is not to be raised, 14 clear days' notice is required for a GM. If a resolution requiring special notice is to be proposed then 28 clear days of notice is required.
Resolutions can only be validly passed at general meeting which is attended from start to finish by a minimum number of people qualifying to be counted. This is known as the quorum. The quorum for general meetings is two, unless the company in question is a single member company. If the company is not a single member company, the quorum can only be reduced to one in exceptional circumstances determined by the court. Proxies representing absent members can count as part of the quorum. However, there must be at least two people physically present in the room for there to be a meeting, and as such, one person who is attending the meeting both in their own right as a member and as a proxy for another, cannot, on their own, fulfil the requirement of a quorum of two.
Generally, members can act by ordinary resolution unless they are required to use some other sort of resolution either by law or by the company's articles of association. For example, the law provides that a special resolution is required to change the company's name or articles.
Members can vote at general meetings in one of two ways, either on a show of hands or on a poll. If a vote is taken on a show of hands, each member has one vote, if a poll vote is taken, each member has one vote for every share they own. Further, it is only if a poll is taken that a proxy can vote. Proxies are representatives of members with as many votes as the members who they represent have assigned to them. Proxy votes count as much as the original member's vote.
The chair at general meetings of members will also have a casting vote in addition to any other vote they may have unless a special article in the articles of association of a company removes this. This is useful for reaching a decision when there is a deadlock.
Only private companies can make use of written resolutions. Copies of written resolutions must be sent to every person who would have been entitled to vote on that resolution on the date of circulation of that resolution. The resolution (if an ordinary resolution) is passed when a simple majority (i.e. more than 50%) has returned an authenticated document approving the resolution.
A written resolution cannot be used to remove a director or auditor from office.
It is the directors who can recommend to the company's members at a general meeting the payment of dividends and their amount. Dividends are then declared by the members who can vote to pay themselves the amount recommended by the directors or a lesser amount.
The directors are only permitted to recommend the payment of a dividend if there are profits available. Even if the company has not made a profit this year, it may still be able to pay a dividend if there are sufficient profits from previous years.