CHAPTER FOURTEEN: MEETINGS AND PROCEEDINGS OF COMPANIES
Meeting of companies refers to any of the types of the General Meetings viz.
(a) Statutory Meeting
(b) The Annual General Meeting
(c) The Extra Ordinary General Meeting
(d) Court ordered meeting
Sub-meetings
Class meetings
Board meetings
General meetings
Committee meetings
Management meetings
14:1 STATUTORY MEETING
This type of meeting is prescribed for public companies only (section 211).
It is to be held within 6 months from the date of incorporation of the
company. The meeting is principally to consider the Statutory Report which
must be sent to the members at least 21 days before the date of the meeting
(section 211 (2).
For contents of the Statutory Report see section 211(3).
The members have a right to discuss, at the meeting, any issue in respect of the
formation of the company and commencement of business or any matter
arising out of the Statutory Report (section 211)(8)).
Shorter Notice allowed- s.217-members with 95% of nominal share
Capital of company can call a meeting
NOTE:
The Statutory Report is also to be delivered to the corporate Affairs
Commission (section 211(6)).
Failure to deliver the report to the Commission may be a ground for
winding up the company (section 408 (b)).
There is a penalty of N50 per day for everyday of default in holding the
meeting (section 212).
14:2 ANNUAL GENERAL MEETING
Every company (private or Public) is to hold an Annual General Meeting. The
notice calling it must describe it as an Annual General Meeting. Not more than
15 months should elapse between the date of one annual general
meeting and the next. However, the first annual general meeting of a company
may be held within 18 months of its incorporation i.e. the company need not
hold its first annual general meeting in the 1st or 2nd year of its incorporation
(section 213(1)). For example if a company was incorporated on 1st November
1995, it need not hold annual general meeting in 1995 or 1996 but must hold it
at least in April 1997. For subsequent annual general meetings, Corporate Affairs
Commission may extend the time for holding the meeting by not more than 3
months (section 213(1)(b)).
One must give at least 21days notice of meetings. S.217(2)(a)
If a company fails to call Annual General Meeting:
One can apply to CAC for exension and CAC can grant that
extension for not more than three months. CAC cannot grant that
extension for more than 3 months.
a member can apply to Corporate Affairs Commission which will give
directives on calling the meeting and such directive will include the power
for one member to apply to court to make an order that such
member shall take 'decisions that will bind members of the
company section 213(2)).
If an application and order are made by s.213(3), even though the
meeting may be held, for example, in 2008, the meeting is to be treated
as the 2007 AGM unless coy resolves that it is the 2008 AGM, and if the
coy so resolves, a copy of the resolution shall within 15days be filed with
the CAC
If there is a default in carrying out the directive of Corporate Affairs
Commission there is a default fine of N500 on the company and every
officer at fault. (section 213(5)).
Business Transaction at Annual General Meetings: The business transacted
at an annual general meeting includes ordinary business and special business
(section 214).
The ordinary business of the meeting includes
1. declaration of dividend,
2. presentation of the financial statement,
3. Directors' and Auditors' report,
4. election of directors to replace those retiring,
5. appointment and remuneration of Auditors and
6. appointment of members of the Audit Committee.
(This is the main business of the AGM)
Any other business is deemed special business.
14:3
EXTRA-ORDINARY GENERAL MEETING:
This type of meeting can be held at any time. It is meant to deal with any
matter that is so important that it cannot wait until the next Annual
General Meeting. (Only type of meeting that need not be held in Nigeria)
1. The Board of Directors or any Director, if there are not other Directors in
Nigeria to form a quorum, may whenever they or he deems fit convenes
an Extra-Ordinary General Meeting (section 215(1)).
2. Extra-Ordinary General Meeting may also be requisitioned by members
holding not less than one tenth of the paid up capital or not less
than one tenth of the total voting rights of members where the
company has no share capital )section 215(2)).
Requisition means a notice of demand (to requisition is not the
same thing as to convene)
Deposit of resolution: The requisitionists must deposit a signed requisition
stating the object of the meeting.
If after 21 days of the deposit of the notice of requisition(resolution) the
Directors fail to call a meeting, the requisitionists may themselves call the
meeting. The meeting shall not be held after the expiration of 3 months
of the deposit.(section 215(4)).
At the meeting, only 50% of holders of one tenth of paid up capital, or not less
than one tenth of the total voting rights of members where the company has no
share capital, can be present.
The costs of these meetings are to be borne by Directors
There must be the quorum present within one hour from the time appointed, as
where such quorum is not present, the meeting is dissolved and that is the end
of the matter
NB: All business transacted at Extra-Ordinary General Meeting are
deemed special (section 215(8)).
14:4 VENUE OF MEETINGS:
All Statutory and Annual General Meetings shall be held in Nigeria
(section 216).
EGM need not be held in Nigeria.
ELIGIBILITY TO ATTEND AND RECEIVE NOTICE OF A GENERAL MEETING
Every member
Legal reps, Receiver, or a trustee in bankruptcy of a member
Every Director
Secretary
NB: s.219
14:5 NOTICE OF MEETING:
All General Meeting requires 21 days of notice calculated from date it is sent
out or posted to the date of the meeting (section 217(1)). However, shorter
notice could be given:
(a) for Annual General Meeting if it is agreed to by all the members
entitled to attend and
vote at the meeting.,
(b) For any other meeting by a majority holding not less than 95% in
nominal value of the shares with right to attend and vote (section 217(2)).
Importance of Notice
To adequately inform the member of the kind of meeting he is called to attend,
the venue, the business or items to be discussed so as to prepare either to
participate in the discussion or even to understand what is going to be discussed.
Failure to give notice in any meeting to a person entitled to receive it shall
invalidate the meeting unless such failure is an accidental omission on the
part of the person(s) giving the notice. See221(1), Young v Ladies Imperial
club
Accidental omission does not include failure to give notice due to a
misrepresentation or misinterpretation of the provisions of law, or the articles
of the company. S.221(2), Ososanya v. J.A.O. Obadeyi
Contents of Notice
To achieve aim and purpose, notice must be clear in its contents. It must not be
misleading or ambiguous. Thus some important information must be contained in
it. The contents of notice as provided for it section 218(1), are:
place,
date,
time
general nature of business to be transacted in detail to enable
members decide whether the issue to be discussed are of interest
to them and whether to attend the meeting.
If there is going to be a special resolution, the terms of the
resolution should he included in the notice (normally the
resolution is quoted).
NOTE: In Annual General Meeting, it will suffice to state in the notice that
the purpose of the meeting is to transact the ordinary business of an
annual general meeting (section 218(2)).
For a list of those entitled to receive notice of meeting see section 219.
Service of Notice: Note especially section 220 (2). Notice of meeting is deemed
to be effected after 7 days of posting the letter.
Effect of Failure to Give Notice: Section 221(1) invalidates the meeting in
favour of a person entitled to receive notice of it and, was not given except if it
was accidental omission. Misrepresentation or, misinterpretation of the provisions
of the act or the Articles of the Company shall not amount to accidental omission
(section 221(2)).
Additional notice: Section 222 provides for additional notice to be given in the
case of public companies besides notice sent to each member.
Notice of meeting must be advertised in at least daily news papers 21 days to the
meeting.
14:6 COURT ORDERED MEETING:
where it is:
impracticable for any reasons to call or conduct a meeting of the
company ,
demise of all directors and shareholders
By s.100 (1) Investment and Securities Act 1999-for a merger.
the court may on it’s own motion ,or on application of directors of persons
entitled to a vote at such meeting, order a meeting to be called (section
223) see Okeowo versus migliore (1979) 11SC 138;(1978 A11 NLR (282;
(1979)12 NSSC 210.
14:7 PROCEEDINGS AT MEETINGS
Quorum: 'this is the minimum number of members that must be present at the
meeting to enable the meeting to start. Normally it is a matter for the Articles of
the company to fix but where it is silent section 232(2) applies i.e. 1/3 of
members or 25 whichever is less. In determining whether there is quorum,
members and proxies will be counted (section 232 (3)). NOTE that the quorum
for 6 members is 2. If lower than 6, the quorum will still be 2.
Voting: This is to be by show of hands except a poll is demanded (section 224).
Right to demand a poll cannot be taken away by the articles of the company
except on issue of election of a Chairman or adjournment of the meeting (section
225).
Proxy: This is the person mandated by a member of a company to represent him
at the company's meeting. He may or may not be a member of the company. A
proxy has the same right to speak and vote at the meeting as the member
appointing him (section 230). The instrument in which the proxy is
appointed must be in writing under the hand of the member of the
company. Where appointed by a company, the instrument in which the
proxy is appointed shall contain the seal of the company. Stamp Duty on
Proxy card - N500.00 Naira .
Corporate Representation: A company which is a member of another company
shall be represented at the General Meeting of that company of which it is a
member by a person authorized on a resolution of the Board of Directors or other
Governing Council (section 231) .
. .
14:8 RESOLUTIONS:
There are two types of resolutions as provided for in section 233(1) and (2)
respectively:
(1) Ordinary resolution, which is passed by a simple majority of
votes cast by members in person or by proxy.Ordinary resolution is presumed
when the Act simply requires the passing of a resolution by the Company, without
saying which (ordinary or special).
(2) Special resolution is passed by at least ¾ (three-forth
majority) of members voting in person or by proxy at a general meeting of
which not less than 21 days notice of intention to propose the resolution has been
given (section 233 (2)). Shorter notice may however be given if agreed to by
majority holding not less than 95% of the nominal value of the shares or by
members representing not less than 95% of the total voting rights incase of
company not having share capital.
Written Resolution: All resolutions shall be passed at General Meeting
otherwise it shall not be effective. But for a private company a written
resolution signed by all members is as valid and effective as if passed in
a General Meeting (section 234).
Requisition of Resolution: Holders of 1/20th of total voting rights can
requisition a notice of their resolution to be circulated to members entitled to
receive notice of the meeting to which the requisition relates (section 235(1). For
when to give notice of resolution or circulate member's statement see section
235(4).
Resolution Requiring Special Notice: When a resolution requires special
notice, notice of intention to move it must be given to the company at least 28
days before the meeting.s.236 (for e.g, where one intends to move a
resolution to remove a Director). The company in turn is to give notice to
members of the proposed resolution at least 21 days before the meeting or
advertise it in a newspaper.
Note Proviso: Once company receives notice, its failure to call a meeting
for a date 28 days or less after the notice will not invalidate the
meetings.
Registration of Some Resolutions: Section 237 provides that printed copy of
certain resolutions and agreements must be sent to the Corporate Affairs
Commission within 15 days of passing the resolution for registration.
These resolution and agreements are enumerated in section 237 (4) as follows:
(a) Special resolution
(b) Unanimous resolution, on issue, which requires special resolution
(c) Unanimous class resolution
(d) Resolution requiring a company to wind up voluntarily passed under
section 457 (a)
14:9 MINUTES:
Every company must cause minutes of proceedings of its general meetings, board
of directors or management meetings to be kept (section 241(1)) at its
registered office (section 242(1)).
The minutes must be entered in books kept for that purpose.
Form of Minutes: The minute shall be kept in the form as prescribed in section
633. See International Agricultural Industries (Nig.) Ltd. versus Chika Brothers
Ltd. [1990] 1 NWLR70.
Class Meetings: This is the meeting held by classes of shareholders where a
company has different classes of shares see section 141.
Provisions of the Act relating to meetings shall apply to any class meeting except
if expressly excluded by the Act itself.
