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acquire the shares within two months of his appointment, otherwise his office as director is
deemed vacated.
What is the term of BoD members?
Most companies’ articles of association provide for the annual retirement of a certain
proportion of the directors and the filling of the vacancies at an annual general meeting.
Retiring directors may be re-elected. It is not uncommon for directors to be appointed for
life and not to be subject to re-election. Nevertheless, section 178(1) of the Companies Law
provides specifically that any director may be removed fromoffice by an ordinary resolution
of the company, not withstanding any provision in its articles of association.
What are the main duties of the BoD?
Between them the board and the members of the company in general meeting may
exercise all the powers of the company. How these powers are shared between the two
is determined by the articles of association, except where the Companies Law specifically
reserves the exercise of certain powers to the members. The board’s powers can, therefore,
be as wide or as restricted as the articles of association may provide.
An act of the directors which may be ultra vires the directors but intra vires the company
may be ratified by the members in general meeting in order to be valid.
What are the issues for which the General Meeting of Shareholders is exclusively competent
to decide?
All companies are required to hold, in each calendar year, an annual general meeting
specified as such in the notice convening it.
The only statutory business required to be transacted at an annual general meeting is the
appointment of the company’s auditors. However, most companies’ articles of association
provide for certain business to be transacted annually at the annual general meeting,
including the appointment of directors in place of those retiring, the declaration of dividends,
the consideration of accounts and the fixing of the auditor’s remuneration. Business of this
nature is generally referred toas ordinarybusiness, andanyother business as special business.
Under what conditions is a decision of the General Meeting of the shareholders valid?
For a decision to be valid proper notice must have been given. An annual general meeting
or a meeting to pass a special resolution requires 21 days’notice and other meetings require
14
days’ notice. The notice period means clear days, i.e. excluding both the day of service
and the day of the meeting and the notice must be in writing. Special notice of 28 days is
required for a resolution to appoint as auditor a person other than the retiring auditor or to
provide expressly that the latter should not be reappointed.
For an annual general meeting a shorter notice period may be agreed by all members
entitled to attend and vote at the meeting. For other meetings a shorter notice period may
be validly agreed by not less than 95 per cent of members entitled to attend and vote.
In order to transact business the required quorum of members must be present in person
or by proxy. If a quorum is not present the meeting will be a nullity. Unless the articles of
association provide otherwise three members personally present will be a quorum for a
public limited company.
For meetings convened by the company, if no quorum is present within half an hour of the
appointed time themeeting will stand adjourned for one week, when themembers present