General Meetings

Meeting chair

Follow “committee rules”

Run your company meetings correctly. No hasty ad hoc gatherings called with slips of paper shoved through doors saying, “Let’s meet.” Follow your legal obligations. Here is a template RTM company Annual General meeting calling notice:  DRAFT GM Notice

If you wonder if it is up to the job, google RTM AGMs and read real world examples.

The Companies Act 2006 does not require an AGM and nor does the Model Articles. But in my opinion your company is an idiot if it does not hold at least one meeting annually for the members to approve the service charge budget and so on.  By “your company” I mean the membership.

You can read numerous horror stories on the Long Leasehold Questions forum of leaseholder run companies (RTMCs and RMCs) where the leaseholders have allowed a small clique to run the building, sometimes for years. You can find where the directors have distilled down to one flat owner’s family member who does not own a flat! This can only come about if the leaseholders as company members allow it to happen. The Companies Act 2006 empowers members of a company to remove its directors, no matter how many solicitor’s letters are fired at members by the existing board.

AgentEven if the leaseholders keep control of their own company, the next swamp the company can sink into is where it appoints one of those allegedly professional managing agents (even and perhaps especially ones who sell themselves as friends of RTM companies) who use their agent contract and Company Secretary role to dictate to the leaseholder directors. It is surprising what shite can be said as ‘professional guidance’.

I have read of an agent blocking a new director from taking up their role on the claim the articles are “out of date”. Nothing whatsoever to do with the agent. If the articles were defective the company would have no valid directors, so the agent would, presumably, have no valid contract.

Company secretary roles are mere admin. Not executive. You will find, perhaps routinely, that ‘professional’ agents will sign their contract with you after much friendly reassurance giving and overnight revert to type, ignoring the terms agreed in the contract, any pleadings or instructions, and fail to supply ongoing financial records. You might wonder if you still have control.

If you are an RTM company, you may find the board is advised ever so strongly to permit the agent to commence forfeiture action against X by communicating directly with the freeholder. The only liability dog in the ring in this caper is the RTM company. The freeholder will want to be indemnified against costs, and agents -as far as I see- can walk away free of consequences if their suggestion leads to financial disaster for their client.

I occasionally play a fun game reading court decisions where leaseholder run companies find themselves on the wrong end of a decision that can be five figure costs, and have a wee look see  for mention of a managing agent.

I urge any leaseholder run company to always do some research of its own. The ARMA site has some excellent warnings on pursuing legal action. Delegating authority to an ‘trigger happy’ agent does not mean you are all in the same boat when stuff hits the fan.

The brutal possibility seems to be that the ‘professional’ industry may rely on experience of leaseholder directors not having the stomach for a contract fight.

As for controlling directors, apart from the obvious issue that to remove one may require a volunteer replacement or two depending on the numbers left, the friend of the members is s168 of the Companies Act 2006.

Here are some summaries of more sections to keep in mind:-

Companies Act 2006

s116: Right of members to inspect register of members without charge.

s154(1): private company must have at least one director (who is a natural person s155)

s161(1): The acts of a person acting as a director are valid notwithstanding that it is afterwards discovered — (a) that there was a defect in his appointment; (b) that he was disqualified from holding office; (c) that he had ceased to hold office; (d) that he was not entitled to vote on the matter in question.

168(1): A company may by ordinary resolution at a meeting remove a director before the expiration of his period of office, notwithstanding anything in any agreement between it and him.

168(2): Special notice is required of a resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed.

248(1): Every company must cause minutes of all proceedings at meetings of its directors to be recorded.

248(2): The records must be kept for at least ten years from the date of the meeting.

s281(1): A resolution of the members (or of a class of members) of a private company must be passed— (a) as a written resolution in accordance with Chapter 2, or (b) at a meeting of the members (to which the provisions of Chapter 3 apply).

s281(3): Where a provision of the Companies Acts— (a) requires a resolution of a company, or of the members (or a class of members) of a company, and (b) does not specify what kind of resolution is required, what is required is an ordinary resolution unless the company’s articles require a higher majority (or unanimity).

s282(1): An ordinary resolution of the members (or of a class of members) of a company means a resolution that is passed by a simple majority.

s282(2): A written resolution is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of eligible members (see Chapter 2).

s282(3): A resolution passed at a meeting on a show of hands is passed by a simple majority if it is passed by a simple majority of— (a) the members who, being entitled to do so, vote in person on the resolution, and (b) the persons who vote on the resolution as duly appointed proxies of members entitled to vote on it.

s282(4): A resolution passed on a poll taken at a meeting is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of members who (being entitled to do so) vote in person or by proxy on the resolution.

s283: Special resolutions – as per ordinary except passed by a majority of not less than 75%.

284(1): On a vote on a written resolution— (a) in the case of a company having a share capital, every member has one vote in respect of each share.

s288(3): A resolution may be proposed as a written resolution— (a) by the directors of a private company (see section 291), or (b) by the members of a private company (see sections 292 to 295).

s291(1): This section applies to a resolution proposed as a written resolution by the directors of the company.

s292(2): The company must send or submit a copy of the resolution to every eligible member.

s291(4): The copy of the resolution must be accompanied by a statement informing the member— (a) how to signify agreement to the resolution (see section 296), and (b) as to the date by which the resolution must be passed if it is not to lapse …

s300: A provision of the articles of a private company is void in so far as it would have the effect that a resolution that is required by or otherwise provided for in an enactment could not be proposed and passed as a written resolution.

s301: A resolution of the members of a company is validly passed at a general meeting if— (a) notice of the meeting and of the resolution is given, and (b) the meeting is held and conducted, in accordance with the provisions of this Chapter (and, where relevant, Chapter 4) and the company’s articles.

s307(1): A general meeting of a private company (other than an adjourned meeting) must be called by notice of at least 14 days. (Unless company using reg 38 of old Table A continues to be bound by 21 days?)

s307(3): The company’s articles may require a longer period of notice than that specified in subsection (1) or (2).

s311(1): Notice of a general meeting of a company must state— (a) the time and date of the meeting, and (b) the place of the meeting.

s311(2): Notice of a general meeting of a company must state the general nature of the business to be dealt with at the meeting. This subsection has effect subject to any provision of the company’s articles.

s313(1): Where a company gives notice of— (a) a general meeting, or (b) a resolution intended to be moved at a general meeting, any accidental failure to give notice to one or more persons shall be disregarded for the purpose of determining whether notice of the meeting or resolution (as the case may be) is duly given. {Excepting s313(2) in respect of members initiated meetings}

s324(1): A member of a company is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak and vote at a meeting of the company.

s325(1): In every notice calling a meeting of a company there must appear, with reasonable prominence, a statement informing the member of—
(a) his rights under section 324, and
(b) any more extensive rights conferred by the company’s articles to appoint more than one proxy.

s325(3): If this section is not complied with as respects any meeting, an offence is committed by every officer of the company who is in default.

s355(1): Every company must keep records comprising— (a) copies of all resolutions of members passed otherwise than at general meetings, (b) minutes of all proceedings of general meetings, and (c) details provided to the company in accordance with section 357 (decisions of sole member).

s355(2): The records must be kept for at least ten years from the date of the resolution, meeting or decision (as appropriate).

s358(3): The records must be open to the inspection of any member of the company without charge.

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