The Department for Business Enterprise & Regulatory Reform ("BERR") recently published a consultation document setting out draft regulations (the "Regulations") to amend the Companies Act 2006 in order to implement the directive (adopted by the EU Commission on 11 July 2007) on the exercise of certain rights of shareholders in listed companies (the "Directive"). Please visit our website for a full explanation of this consultation process, which ended on 30 January 2009.
Under the Directive and proposed Regulations, the minimum notice period for general meetings of traded companies is generally 21 days, however, this minimum notice period may be reduced to 14 days, if the following two conditions are met:
- The traded company must offer "the facility for shareholders to vote by electronic means accessible to all shareholders";
- A resolution to reduce the notice period to not less than 14 days must have been passed either unanimously on a show of hands or on a poll by a two-thirds majority of those voting.
The Government asked for views on whether resolutions to permit traded companies to hold a general meeting on 14 days' notice should be passed on the basis of a two-thirds majority or whether it should be 75 percent as for special resolutions.
As a large number of listed companies will have already held their 2009 AGMs by the date of implementation of the Regulations on 3 August 2009, BERR has responded to concerns that these companies would not be able to pass the necessary resolution at their AGMs this year by clarifying that listed companies wishing to be able to call a General Meeting (other than an AGM) on 14 clear days' notice after 3 August 2009 should consider passing a special resolution with a 75 percent majority prior to that date.
In response to this, the City of London Law Society has developed a pro forma circular which includes a suggested enabling resolution.
The Government also asked for views on whether and, if so, how it should define "electronic means accessible to all shareholders", however, BERR has confirmed that this issue does not need to be resolved for an enabling resolution to be passed prior to 3 August 2009.
A full copy of BERR's advice can be found here