Procedure Model Articles Notes

• MA9(1) and (3): must be given to all the Ds before the meeting, irrespective of whether he is out of the UK or not

• An individual D may waive their right to be notified (MA9(4))

• Re Homer: it must be reasonable notice

• MA9(3) and Re Trinidad: Notice may be oral

• MA9(2): the notice must give date, time, place, method of communication

• Apply to the facts: has there been reasonable notice? If so, why?

Under s.177/s.182

a D must make a Declaration of Interests

(See Director’s Duties Chart for more D’s Duties)

If In a Proposed Transaction (s.177)

• a D of the Co. has a direct or indirect (e.g. a spouse) interest, then the nature and extent of his interest must be made to the other directors (s.177(1)) via:

1. at the BM (s.177(2)(a)) as an Oral to the other Directors T&F NOTE;

2. notice in writing to the other Ds (s.177(2)(b)(i)) if in Writing it must comply with CA s184, namely it must be in paper or electronic form (if authorised by Ds) and be sent by hand, post or, electronically;

3. General Notice in writing (s.177(2)(b)(ii)) (generally when a D’s interest arises repeatedly over time and in order for the D not to make a declaration every time) namely when:

1. Under CA s 185(2)(a) a D of a Co. is also a D or a S’holder in another Co and both companies are trading.

2. Under CA s 185(2)(b) D made a general notice regarding his connection with a specified person e.g. his wife/brother.

4. Before the transaction is entered into (s.177(4))

5. If becomes inaccurate, a further declaration is needed (s.177(2))

6. T&F NOTE notice to a Co.’s secretary does not amount to valid notice, valid notice is to Ds.

• There are some exceptions:

  • D is not aware of either the interest or transaction (s.177(5))

  • If interest cannot reasonably be regarded as likely to give rise to a conflict of interest (s.117(6)(a))

  • T&F NOTE If other Ds are already aware (s.117(6)(b))

  • If it concerns the terms of his service contract (s.117(6)(c))

  • A sole D need not make a declaration

• However, regardless of the above exceptions, it is always good practice to declare any interest

• The effects of making the declaration are that:

  • The D can’t vote or count in the quorum (MA14(1))

  • Unless:

    • MA14(4) exceptions apply (guarantee given by D; subscription of shares; benefits to employees); or

    • MA14(3), by OR of members, temporarily disapplies MA14(1)

If in an Existing Transaction (s.182)

• Direct or indirect (e.g. a spouse) interest (s.182(1))

• The same exceptions as above

• The nature and extent of his interest must be made:

  • As soon as reasonably practicable (s.182(4))

  • At a BM (s.182(2)) or by notice as per s.184 (in writing) or s.185 (general notice)

  • Further declaration made if it becomes inaccurate (s.182(2))

• The effects of making the declaration are the same as above

• A D who fails to declare under s.183 commits a criminal offence

• Apply to the facts: what is the interest? Has the declaration been made?

• After due and careful consideration, the Board resolves to:

1. Call a GM or circulate a WR (s.302)

2. [adopt new articles SR (s.21)]

3. [appoint a new director, effected when resolution says – MA17]

4. [approve and circulate the proposed buy-back contract]

5. [approve the draft terms of the loan to D [subject to GM] – MA3/s.197]

6. [call a GM for S’holders to pass OR for the proposed loan to D - MA3/s.197]

7. [approve the terms of the service contract [subject to GM] – MA3]

8. [approve the wording of the signage and order it – MA3]

9. [approve to change the name SR (s.77)]

10. [authorise 2 Ds to sign – ss.43/44]

11. [change accounting reference date – s.392/MA3]

12. [change the address of the registered office – s.87/MA3]

13. [change the stationary – MA3]

• Apply to the facts: have these been passed? See MA14 on ability to vote. What combination of Ds are needed to pass?

• Director (s.302)

• Shareholder (s.305(1)):

  • They must first request Ds to call one (s.303)

  • The members together must own 5% of voting rights

  • Ds then have 21 days to call a GM not to be held more than 28 days after notice calling the meeting

• Court (s.306)

• Auditor (s.518)