A guide to shareholder meetings for small businesses

You’ll hold shareholder meetings for many different reasons, regular progress and updates meetings, and to manage shareholder decision-making on extraordinary events.

You may even hold them remotely and enable decision-making via remote and written format.

There is no minimum number of shareholder board meetings prescribed by law.

The rules

There are a number of rules surrounding how shareholders vote, the notice periods of any meetings that you propose to call and how many shareholder votes may be required to approve actions requiring their consent, which have been proposed by the board.

Your own constitution and relevant shareholders agreement(s) will set out many of these rules and time frames.

Check out our helpful guide on shareholders agreements.

Some shareholder rights are also added by Irish law.

For a detailed rundown of shareholder rights and duties, see our guide on this topic.

Annual General Meetings (AGMs)

In general, companies are required by law to hold an AGM every calendar year.

No more than 15 months should elapse between one AGM and the next.

The first AGM must be held within 18 months of incorporation.

Certain companies, such as a “single member company” and LTDs, may dispose with the holding of an AGM.

Special rules apply where a company decides not to hold an AGM.

A single-member company can decide not to hold an AGM.

However, the member must write to the company to inform them of their decision not to hold an AGM.

The company is required to send the financial statements and other documents that would normally be sent to the member before the AGM to the member.

An LTD Company may dispense with holding an AGM where all members entitled to attend and vote sign a written resolution dispensing with the AGM.

All the members of an LTD (where there is more than one member) must approve and sign a written resolution not to hold an AGM.

The resolution must be approved before the latest date for holding the AGM, and each member must confirm in writing that they have received the company’s financial statements and agree on all other matters that would normally be decided at the AGM.

Although these exceptions may apply you should also check your company constitution as it may require you to hold an AGM.

If your private limited company is holding an annual general meeting (AGM), you need to give the members (also called ‘shareholders’) at least 21 days’ notice.

The notice of the AGM should include the Date, Time and Place of the meeting and the Agenda (listing items to be discussed and voted on at the AGM).

A copy of the financial statements should also be provided to the members 21 days before the meeting, but the members can consent to a shorter period.

Members should also be told of their right to appoint a proxy and a proxy form should also be included.

Our notice of annual general meeting is the ideal template for this.

What shareholders vote on/must approve at an AGM

There are some decisions that your board of directors are probably not able to decide or action without shareholder approval.

The business of the AGM would generally include the following:

1. considering the company’s statutory financial statements and the report of the directors and, unless the company is entitled to and has availed itself of the audit exemption, the report of the statutory auditors on those statements and that report;
2. a review of the company’s affairs;
3. the declaration of a dividend (if any) of an amount not exceeding the amount recommended by the directors;
4. the authorisation of the directors to approve the remuneration of the statutory auditors (if any);
5. the election and re-election of directors, if required by the Company’s constitution;
6. the appointment or re-appointment of statutory auditors, if auditors are required; and
7. the remuneration of the directors, if required by the Constitution

We’ve covered these in the section immediately above, where you will also find the template resolutions that your board must use to propose their intended actions to the shareholders, so that they may be approved.

It is important that the approval process above is followed correctly, or the directors will be in breach of their legal duties to the company – with some fairly serious consequences possible as a result, including the ability for the shareholders to have them removed – and, in the worst cases, they may face fines and/or disqualification as a director.

Extraordinary General Meetings (EGM)

All general meetings, other than an AGM, are considered Extraordinary General Meetings.

Notice must be given of each general meeting to every member, director and secretary of the company as well as the personal representative of a deceased member.

If an auditor is appointed, they should receive notice too.

People entitled to notice of general meetings

Notice of general meetings should be given to:

• every member (shareholder);
• the personal representative of a deceased member
• the assignee in bankruptcy of any bankrupt member of the company
• the directors and secretary of the company.

Where there is an auditor, they are also entitled to receive notice of general meetings.

Notice Periods

Each general meeting must have 7 days’ notice before being called.

However, an annual general meeting or a meeting where a special resolution is to be passed must have 21 days’ notice.

A general meeting can be held at shorter notice if all the members (and the auditors) consent to the meeting being held at shorter notice.

Your constitution may provide for a longer notice period, but it cannot provide for a shorter period.

How shareholders vote

The chairperson, if any, of the board of directors shall chair every general meeting of the company.

Votes are counted based on either a show of hands or a poll.

Some decisions – for example, the approval of credit transactions – can be decided on the basis of reaching over 50% of the votes.

This is known as a simple majority, and the decisions that use this voting type are known as ordinary resolutions.

Unless a poll is demanded, voting is by a show of hands.

In a show of hands, each member has one vote – but on a poll, the votes will be weighted by the voting rights attached to the shares held by each member.

A poll may be demanded at a meeting in relation to any matter before the meeting.

The persons entitled to demand a poll are the chairperson, at least three members present in person or by proxy, or any member or members representing not less than 10% of the total paid-up shares and representing not less than 10% of the voting rights of all the members.

Where there is an equality of votes, whether on a show of hands or a poll, the chairperson is entitled to a second or casting vote.

However, some more complex decisions – for example, changes to the constitution – are known as special resolutions, and these must be decided by a majority vote of at least 75% of the voting members.

Just like board meetings, there must be a minimum number (quorum) of shareholders present at a shareholder meeting (usually 2), unless you only have one shareholder.

Your constitution should specify the minimum number.

Proxies

Directors must remind shareholders they’re welcome to appoint a proxy if they can’t attend the shareholders meeting.

A ‘proxy’ is someone who can attend the shareholders meeting and vote on a poll or a show of hands on the shareholder’s behalf.

A shareholder can appoint a proxy within a certain amount of time (not less than 48 hours) before the meeting.

What do you need to hold shareholder meetings?

Assuming that it’s just a straightforward shareholder meeting you want to hold…

You’ll need:

1. Board minutes/resolution

Resolving to convene a shareholder meeting.

2. A notice to the shareholders informing them when the meeting will take place

Our notice of annual general meeting is the ideal template for this.

Again, there’s no magic to this document – provided that the time, date and place of the venue are very clear, as well as the purpose of the meeting and what is proposed for discussion.

Having said that, if the directors intend to propose a resolution for the shareholders to vote on, the exact text of that resolution must be provided in this notice to the shareholders.

Otherwise, the resolution will not be effective.

In addition, shareholders must be given at least 7–21 clear days’ notice of the meeting and reminded about their right to appoint a proxy up to 48 hours before the meeting takes place (unless a shorter time is stated in the Constitution).

The only exception to this notice period is if all those attending with voting rights have given written and signed consent to a shorter notice period.

Check your constitution, as it will often specify the notice time frame that you’ll need to apply and whether and how shorter notice periods should be managed.

3. Standard shareholder meeting agenda

As with board meetings, there’s no magic to agendas for shareholder meetings either.

Just ensure the agenda is clear and circulated in advance, together with the notice to the shareholders informing them of the meeting, so that those attending can come prepared to discuss the items listed and, if need be, to respond by circulating their own reports or pre-reading for attendees.

You can adapt our standard agenda to suit your purposes.

4. Shareholder resolutions

You’ll need these if the shareholders are being asked to vote on something.

Different voting percentages are relevant to different types of voting decisions.

Again, if your shareholders are geographically spread out, you may prefer to send them written resolutions to approve rather than require their physical attendance at a location.

You’ll find a range of template written resolutions and what’s needed in relation to each of them in our resolutions hub

Once the resolution has been voted on, you must then file it with the Companies Registration Office (CRO) within 15 days of the meeting, also sending accompanying forms and fees where necessary.

5. Minutes

You must, as soon as practicable after the holding of a meeting of members or the passing of a resolution, complete Minutes for that meeting or resolution.

You can use our Minutes (AGM) template to help you.

You can adapt this template for EGMS also

All records must be retained by the company.