How to properly call a General Meeting in your private company

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I have recently been asked by clients about the proper procedure to follow when calling a General Meeting (GM) of a private company.

A private company is required to hold a general meeting of the shareholders, or members, in a number of circumstances. When a company is required to call a general meeting will principally be set out in the company’s constitution.

Some examples of circumstances that ordinarily require a general meeting of the company include:

  1. A change to a company’s constitution;
  2. A change to a company’s share structure; and
  3. Other significant decisions requiring shareholder approval

Calling a General Meeting of the company

When calling a GM of the company, consideration must be given to the following, in the order as set out below:

1. The company’s constitution – this will usually set out:

  • When a GM must be called;
  • How many days notice of the meeting must be given to the members of the company;
  • What the notice of GM must include;
  • The acceptable methods in which the notice of GM may be given to the members of the company.

2. The Corporations Act 2001 (Cth) (“the Act”) – where a company’s constitution does not address any of the aspects listed above, consideration can then be given to the default provisions provided by the Act. The Act sets out the formalities of a general meeting, which include the following:

  • The company must give the members at least 21 days notice of the general meeting;
  • Notice of the general meeting must be in writing and contain the following:

i. Place, time and date of the GM;

ii. The nature of the meeting, along with any special or proposed resolutions to be passed; and

iii. The rights of the members (ie voting by proxy, and the procedure to vote by proxy).

3. The ways in which notice of the general meeting can be given to the members:

i. Personally;

ii. Post to the nominated address of the member – however, where notice of aGM is delivered to a member by post, the Act sets out that the notice is deemed to have been received three days after the notice is posted. This should be taken into consideration when determining the date of the GM, as the 21 day notice period will begin on the third day after the notice is posted; and

iii. Electronic means – facsimile and email.

Calling a general meeting of your company can be a complex task, and where the formalities are not adhered to, there is a risk that any resolutions passed will be invalid.  If your company requires a general meeting to be held, and you are unsure on the procedures to follow, or how to properly draft the notice, or resolutions, do not hesitate to contact me.

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